Carter Bankshares : 2025 Annual Report Annual Report of 2025 Annual Report, PDF file,
CARE
Published on 04/15/2026 at 11:12 am EDT
Annual Report
Corporate Headquarters at Beaver Creek
NOTICE IS HEREBY GIVEN that pursuant to its Bylaws and call of its Directors, the 2026 Annual Meeting of Shareholders of CARTER BANKSHARES, INC., Martinsville, Virginia, will be held at New College Institute, 191 Fayette St., Martinsville, Virginia 24112, Wednesday, May 27, 2026 at 10:00 a.m. Eastern Time, for the purposes of considering and voting upon the following matters:
To elect the 11 persons listed in the proxy statement dated April 15, 2026 to serve as Directors of the Company until the 2027 Annual Meeting of Shareholders.
To approve, in an advisory and non-binding vote, the compensation of the Company's named executive officers as disclosed in the proxy statement.
To ratify the appointment of the independent registered public accounting firm of Crowe LLP as the independent auditors of the Company for the fiscal year ending December 31, 2026.
To transact such other business as may be properly brought before the meeting or any adjournment thereof. The Board of Directors at the present knows of no other business to be presented at the Annual Meeting.
Only those shareholders of record at the close of business on March 25, 2026 shall be entitled to notice of the meeting and to vote at the meeting or any adjournment thereof.
Important Notice Regarding the Availability of Proxy Materials for the Shareholders' Meeting to be held May 27, 2026. The 2026 Proxy Statement, Proxy Card, and Annual Report to Shareholders for the year ended December 31, 2025, are also available at "https://www.investorvote.com/CARE" beginning April 15, 2026.
By Order of the Board of Directors
April 15, 2026
This proxy statement is furnished in connection with the solicitation of the proxies to be used at the 2026 Annual Meeting of Shareholders (the "Annual Meeting") of Carter Bankshares, Inc. (the "Company"), Martinsville, Virginia to be held May 27, 2026. As permitted by rules adopted by the U.S. Securities and Exchange Commission (the "SEC"), the Company is making this proxy statement and its 2025 Annual Report to Shareholders available to certain shareholders electronically over the Internet. A Notice of Internet Availability of Proxy Materials (the "Notice of Internet Availability") or, in some cases, this proxy statement, the accompanying form of proxy and our 2025 Annual Report to Shareholders, was first mailed to shareholders on or about April 15, 2026. Shareholders who receive the Notice of Internet Availability will not receive a printed copy of the proxy materials in the mail, unless specifically requested. Instead, the Notice of Internet Availability instructs you on how to access and review over the Internet all of the important information contained in the proxy statement and our 2025 Annual Report to Shareholders and on how you may submit your proxy. If you receive the Notice of Internet Availability and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability.
The Company was incorporated on October 7, 2020, to become Carter Bank & Trust's (the "Bank") parent bank holding company in a corporate reorganization (the "holding company reorganization"). Effective November 20, 2020, the Bank merged with a special purpose merger subsidiary of the Company and became a wholly-owned subsidiary of the Company. In the holding company reorganization, each outstanding share of the Bank's common stock was converted into one share of the Company's common stock. Prior to the holding company reorganization, the Company had no material operations. In connection with the holding company reorganization, all directors of the Bank became directors of the Company. Certain references in this proxy statement to the Company refer to the Company and/or the Bank, and actions discussed in this proxy statement that occurred prior to November 20, 2020 were taken by the board of directors, committees and/or associates of the Bank.
Voting in Person at the Annual Meeting or by Proxy
You will receive multiple Notices of Internet Availability or printed copies of the proxy materials if you hold your shares in multiple accounts. You should vote the shares represented by each Notice of Internet Availability and proxy card you receive to ensure that all of your shares are voted.
Shareholders of record can vote in person at the Annual Meeting or by proxy. There are three ways for shareholders of record to vote by proxy:
By Internet - You can vote over the Internet by following the instructions on the proxy card or Notice of Internet Availability (you will need the control number on the proxy card or Notice of Internet Availability);
By Telephone - If you receive a printed copy of the proxy materials, you can vote by telephone (toll-free) by following the instructions on the proxy card (you will need the control number on the proxy card); or
By Mail - If you receive a printed copy of the proxy materials, you can vote by mail by signing, dating and mailing the enclosed proxy card in the accompanying postage paid envelope.
If you vote by returning an enclosed proxy card, if the proxy card is properly signed and returned, the shares represented thereby will be voted at the Annual Meeting in accordance with the specifications made on the proxy. When no choice is indicated, the proxy will be voted "FOR" all Director nominees in Proposal 1, "FOR" Proposal 2, "FOR" Proposal 3 and according to the recommendations of the Board of Directors (the "Board") of the Company on any other matter that may properly come before the meeting or any adjournment thereof. Proxies will extend to, and will be voted at, any properly adjourned session of the Annual Meeting. Voting by proxy over the Internet, by telephone or by mailing a proxy card will not affect your right to attend or to vote in person at the Annual Meeting.
If you hold your shares through a bank, broker or other holder of record, you will receive voting instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. If you hold your shares through a bank, broker or other holder of record, and you plan to vote in person at the Annual Meeting, you should contact the holder of record (that is, your bank, broker or other nominee) to obtain a legal proxy or broker's proxy card and bring it to the Annual Meeting as proof of your authority to vote the shares.
Revocation of Proxies
If you are a shareholder of record, you may change or revoke your proxy at any time before your shares are voted at the Annual Meeting, by any of the following methods:
By submitting a written notice of revocation to the Secretary of the Company by the close of business on May 26, 2026;
By submitting a completed proxy card bearing a later date than any other proxy submitted by you by the close of business on May 26, 2026;
By Internet by following the Internet voting instructions on the proxy card or Notice of Internet Availability (you will need the control number on the proxy card or Notice of Internet Availability) by 1:00 a.m. Eastern Time on May 27, 2026;
By telephone by following the telephone voting instructions on the proxy card (you will need the control number on the proxy card) by 1:00 a.m. Eastern Time on May 27, 2026;
By attending the Annual Meeting and voting in person.
The last Internet vote, telephone vote, proxy card vote or in person vote that you submit in accordance with all instructions, including the timing deadlines set forth above, with respect to the same shares is the one that will be counted.
Solicitation of Proxies
Proxies in the form enclosed herewith are solicited by the Board. In addition to the solicitation of proxies by this proxy statement, officers and regular associates of the Company may solicit proxies from shareholders in person, by telephone, or by mail, acting without any compensation other than their regular compensation. The cost of soliciting proxies will be borne by the Company.
Questions During the Annual Meeting
During the Annual Meeting, we intend to answer questions that are pertinent to shareholders generally and the matters to be considered at the Annual Meeting, subject to time constraints. Substantially similar questions may be answered once to avoid repetition and allow for more time for other questions.
Directions to the Annual Meeting
To obtain directions to attend the Annual Meeting and vote in person, please contact the Secretary of the Company, at 276-226-1336.
Voting Rights of Shareholders
The number of shares of common stock outstanding and entitled to vote at the Annual Meeting is 22,159,980 as of the record date. Only those shareholders of record at the close of business March 25, 2026 shall be entitled to vote at the meeting.
A majority of the shares entitled to be voted, represented in person or by proxy, will constitute a quorum for the transaction of business at the meeting. Each share is entitled to one vote upon each matter to be presented at the meeting.
With regard to the election of Directors, votes may be cast "FOR" any given nominee or withheld. If a quorum is present, the nominees receiving the greatest number of the votes cast (even if less than a majority) will be elected Directors; therefore, votes withheld will have no effect.
For the advisory vote to approve the compensation of the Company's named executive officers ("NEOs") and the ratification of the selection of the independent registered public accounting firm Crowe LLP as the independent auditors of the Company for the 2026 fiscal year, votes may be cast "FOR" or "AGAINST" or you may abstain from voting. For each of these proposals, if a quorum is present, the proposal will be approved if the votes cast "FOR" the proposal exceed the votes cast "AGAINST" the proposal.
An abstention does not constitute a vote "FOR" or "AGAINST" any proposal. "Broker non-votes" (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owner or the persons entitled to vote the shares, and (ii) the broker does not have discretionary voting power on a particular matter) will be treated in the same manner as abstentions. The election of directors and the advisory vote to approve the compensation of the Company's NEOs are not considered routine matters; therefore, brokers do not have discretionary voting power with respect to these proposals. The ratification of the selection of Crowe LLP as the Company's independent registered public accounting firm for the 2026 fiscal year is considered a routine matter; therefore, brokers do have discretionary voting power with respect to this proposal. Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting, but will have no effect on the outcome of any of the proposals.
The exact size of the Board shall be fixed by the Board prior to each annual meeting. As established in the Company's Articles of Incorporation and Bylaws, the number of Directors shall at no time be less than 5 nor more than 30. The joint Nominating and Compensation Committee of the Company and Bank (the "Nominating and Compensation Committee") has recommended and the Board has nominated the 11 persons named below to the Board to serve until the 2027 Annual Meeting of Shareholders or until their successors have been elected and qualified. Each of the nominees is a current member of the Board. The Board believes that the nominees will be available and able to serve as Directors if elected, but if any of these nominees becomes unavailable or unable to serve, the persons named in the proxy may exercise discretionary authority to vote for a substitute proposed by the Board. In no event will a proxy be voted for more than 11 Directors.
The Board is not aware of any family relationship between any Director, executive officer or person nominated by the Company to become a Director; nor is the Board aware of any involvement in legal proceedings that would be material to an evaluation of the ability or integrity of any Director, executive officer or person nominated to become a Director.
The following paragraphs provide information regarding each nominee's specific experience, qualifications, attributes and skills that led to the conclusion that he or she should serve as a Director. We also believe that all of our Director nominees have a reputation for honesty and adherence to high ethical standards. References below to joining the Board refer to the board of directors of the Bank for years 2006 to 2020, and these persons became Directors of the Company as of the holding company reorganization. It is the intent of the persons named in the proxy, unless otherwise directed therein, to vote "FOR" the election of the following nominees:
Managing Director of Marketing Xchange Worldwide, LLC, a full-service sports practice that specialized in both contract negotiation and venture management for professional athletes in the National Football League. He also served as Vice President, Administration and Operations of Stephens Transportation Corporation. Mr. Stephens, a Qualified Risk Director®, has a Corporate Director Certificate from Harvard Business School, Certificates in Risk Governance® and Cyber Risk Governance® from The DCRO Institute, and a Certificate in Private Company Governance from the Private Directors Association®. He earned an MBA degree from Virginia Commonwealth University-School of Business and a BS degree in Economics from Rutgers University. Mr. Stephens was appointed to the Board in 2022. Mr. Stephens is qualified to serve as a Director due to his education, business background, governance acumen, leadership roles, and broad experience with private and public companies.
The following individuals are Directors of the Company. Ages are given as of April 15, 2026:
Name
Current Position Age
Director
Since Independent
In
Audit
terest Rate
Risk
Credit Nominating &
Risk Compensation
Executive &
Governance
Risk
Management
Michael R. Bird
Retired CFO of Virginia Lutheran 71 Homes, Inc.
2018**
YES
Chair
Kevin S. Bloomfield
Managing Partner at Bloomfield 55 Partners, LLC
2020**
YES
Robert M. Bolton
Founder and President, CEO and 57 CIO of Iron Bay Capital
2020**
YES
Gregory W. Feldmann
President and Founder of Skyline 69 Capital Strategies, LLC
2017**
YES
Chair
Chair
James W. Haskins
Chairman of the Board of
Directors; Attorney and Principal 85
1982*
NO
Chair
of Young, Haskins, Mann,
Gregory and Wall, P.C.
Phyllis Q. Karavatakis
Vice Chairman of the Board
of Directors; Retired Senior 70
Executive Vice President, Special Projects of Carter Bank & Trust
2017**
NO
Jacob A. Lutz, III
Retired Partner of the law firm 70
Troutman Pepper Locke LLP
2022
YES
Chair
Catharine L. Midkiff
Retired Executive from General 66 Electric Capital Corporation
2018**
YES
Chair
Curtis E. Stephens
Co-Founder of Name, Image, and Likeness Metaverse Studios, Inc. 60
United Network for Collegiate Pantry Sharing, Inc.
2022
YES
Litz H. Van Dyke
CEO of Carter Bank & Trust and 62 Carter Bankshares, Inc.
2017**
NO
Elizabeth L. Walsh
Owner and Managing Member of 58 Eliz, LLC
2020**
YES
and Chief Operating Officer of
* Indicates year first served as a director of one of the 10 banking institutions that were merged into and created Carter Bank & Trust in 2006 (each a "Merged Bank" and collectively, the "Merged Banks"). The Merged Banks were Blue Ridge Bank, N.A., Central National Bank, Community National Bank, First National Bank, First National Exchange Bank, Mountain National Bank, Patrick Henry National Bank, Patriot Bank, N.A., Peoples National Bank and Shenandoah National Bank.
** Indicates the year the director joined the board of directors of the Bank prior to the holding company reorganization.
Financial Reporting/ Audit/ Capital Planning
•
•
•
•
•
•
•
•
•
•
•
Leadership
•
•
•
•
•
•
•
•
•
•
•
Technology
•
•
•
•
•
•
•
•
•
Risk Management
•
•
•
•
•
•
•
•
•
•
Business Operations
•
•
•
•
•
•
•
•
•
•
•
Corporate Governance
•
•
•
•
•
•
•
•
•
•
Cybersecurity and Information Security
•
•
•
•
•
•
•
•
•
Board Demographics
Age
71
55
57
69
85
70
70
66
60
62
58
Gender
M
M
M
M
M
F
M
F
M
M
F
Tenure (years)
8
6
6
9
44
9
4
8
4
9
6
The following individuals are executive officers of the Company. Ages are given as of April 15, 2026:
A. Loran Adams 65 Executive Vice President and Director of Regulatory Risk Management of the Bank since 2018
Wendy S. Bell 62 CFO of the Company since November 2020; Senior Executive Vice President and CFO of the Bank since 2020
Jane Ann Davis 63 Executive Vice President and Chief Administrative Officer of the Bank since 2017
Tony E. Kallsen 58 Senior Executive Vice President and Chief Credit Officer of the Bank since 2023
Bradford N. Langs 60 President and Chief Strategy Officer of
the Bank since 2020
Matthew M. Speare 59 Senior Executive Vice President and
Chief Operations Officer of the Bank since 2023
Litz H. Van Dyke 62 CEO of the Company since November
2020; CEO of the Bank since 2017
Prior to 2018, Senior Vice President and Director of Regulatory Risk Management of the Bank since 2017; prior to joining the Bank, Director of Internal Audit, Georgia Bank & Trust from 2012 to 2016.
Executive Vice President and CFO of the Bank from 2017 to 2019; prior to joining the Bank, Senior Vice President and Senior Finance Officer, First Commonwealth Financial Corporation from 2010 to 2017.
Prior to 2017, Executive Vice President, CFO and Chief Operating Officer of the Bank.
Prior to 2023, Executive Vice President and Chief Credit Officer of the Bank since 2018; prior to joining the Bank, Senior Vice President and Senior Credit Officer, First Commonwealth Financial Corporation from 2010 to 2017.
Prior to 2020, Executive Vice President and Chief Strategy Officer of the Bank from 2017 to 2019; prior to joining Carter Bank & Trust, Chief Risk Officer, Chief Credit Officer and Treasurer, Coastal States Bank from 2009 to 2017.
Prior to 2023, Executive Vice President and Chief Information Officer of the Bank since 2017; prior to joining the Bank, Executive Vice President and Chief Information Officer, Regions Bank from 2013 to 2017.
Prior to 2017, Executive Vice President of the Bank since July 2016; prior to joining the Bank, Practice Manager, CCG Catalyst Group from 2012 to 2016.
The following table sets forth certain information concerning the persons known by us to be the beneficial owners of more than 5% of the outstanding shares of the Company's common stock as of March 25, 2026.
BlackRock, Inc.
50 Hudson Yards
1,730,464(2)
7.81%
New York, NY 10001
Fourthstone LLC
L. Phillip Stone, IV, Managing Member and
Beneficial Owner
1,236,393 (3)
5.58%
575 Maryville Centre Drive, Suite 110
St. Louis, MO 63141
The Vanguard Group 100 Vanguard Boulevard
Malvern, PA 19355
Dimensional Fund Advisors LP 6300 Bee Cave Road, Building One Austin, TX 78746
1,227,878(4) 5.54%
1,123,730(5) 5.07%
(1) Percentages are based on 22,159,980 shares of common stock issued and outstanding at March 25, 2026.
(2) Based solely on information as of December 31, 2023 contained in Amendment No. 2 to Schedule 13G filed with the SEC on January 26, 2024 by BlackRock, Inc., including notice that it, through various subsidiaries, has sole investment power as to 1,730,464 shares and sole voting power as to 1,696,306 shares.
(3) Based solely on information as of December 31, 2025 contained in Schedule 13G filed with the SEC on February 13, 2026 by Fourthstone LLC, including notice that it has shared investment power as to 1,236,393 shares and shared voting power as to 1,236,393 shares. In addition to Fourthstone LLC, the persons reporting information on the Schedule 13G include: (i) Fourthstone Master Opportunity Fund Ltd, which has shared investment power as to 958,846 shares and shared voting power as to 958,846 shares; (ii) Fourthstone GP LLC (the general partner of Fourthstone QP Opportunity Fund LP and Fourthstone Small-Cap Financials Fund LP), which has shared investment power as to 277,547 shares and shared voting power as to 277,547 shares; (iii) Fourthstone QP Opportunity Fund LP, which has shared investment power as to 251,417 shares and shared voting power as to 251,417 shares; (iv) Fourthstone Small-Cap Financials Fund LP, which has shared investment power as to 26,130 shares and shared voting power as to 26,130 shares; and (v) L. Phillip Stone, IV (the managing member of Fourthstone LLC and Fourthstone GP LLC), who has shared investment power as to 1,236,393 shares and shared voting power as to 1,236,393 shares.
(4) Based solely on information as of December 29, 2023 contained in Amendment No. 1 to Schedule 13G filed with the SEC on February 13, 2024 by The Vanguard Group, including notice that it has sole investment power as to 1,208,809 shares, shared investment power as to 19,069 shares and shared voting power as to 10,365 shares. These shares may be owned by The Vanguard Group, Inc.'s clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts. On March 26, 2026, The Vanguard Group filed Amendment No. 2 to Schedule 13G indicating that as a result of an internal realignment in January 2026, as of March 13, 2026, The Vanguard Group no longer has, or is deemed to have, beneficial ownership over these shares. A subsidiary or business division of a subsidiary of The Vanguard Group may now beneficially own some or all of these reported shares, but no Schedule 13G reporting such ownership has been filed as of March 31, 2026.
(5) Based solely on information as of December 31, 2025 contained in Schedule 13G filed with the SEC on January 21, 2026 by Dimensional Fund Advisors LP, including notice that it has sole investment power as to 1,123,730 shares and sole voting power as to 1,100,055 shares. Dimensional Fund Advisors LP, an investment adviser registered under the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (collectively, the "Funds"). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, "Dimensional") may possess voting and/or investment power over shares that are owned by the Funds, and may be deemed to be the beneficial owner of the shares held by the Funds. The shares reported in the Schedule 13G are owned by the Funds, and Dimensional disclaims beneficial ownership of such securities.
The following table sets forth, as of March 25, 2026, the beneficial ownership of the Company's common stock of each Director, the executive officers identified in the Summary Compensation Table (referred to as our NEOs) and the Company's current Directors and executive officers as a group. For purposes of the table below, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 of the Securities Exchange Act of 1934 (the "Exchange Act") under which, in general, a person is deemed to be the beneficial owner of a security if he/she has or shares the power to vote or direct the voting of the security or the power to dispose of or direct the disposition of the security, or if he/she has the right to acquire beneficial ownership of the security within sixty days. The shares listed in the table below include restricted stock that has not yet vested and is restricted as to the sale or other transfer. The shares listed in the table below do not include shares underlying outstanding performance units ("PUs") that were granted to Mr. Van Dyke, Mr. Langs, Ms. Bell, Mr. Kallsen, and Mr. Speare and remain subject to vesting conditions more than sixty days after March 25, 2026.
Name
Amount and Nature of Beneficial Ownership
Ownership as a Percentage of Common Stock Outstanding(1)
Bell, Wendy S.
40,223
*
Bird, Michael R.
16,576
*
Bloomfield, Kevin S.
18,220
*
Bolton, Robert M.(2)
69,129
*
Feldmann, Gregory W.
17,201
*
Haskins, James W.(3)
65,453
*
Kallsen, Tony E.
20,619
*
Karavatakis, Phyllis Q.
21,695
*
Langs, Bradford N.
32,593
*
Lutz III, Jacob A.
19,690
*
Midkiff, Catharine L.
19,056
*
Speare, Matthew M.
26,793
*
Stephens, Curtis E.
9,032
*
Van Dyke, Litz H.
67,467
*
Walsh, Elizabeth L.(4)
58,947
*
All Directors and Executive Officers as a Group (17 Persons)(5)
526,536
2.38%
(1) Percentages are based on 22,159,980 shares of common stock issued and outstanding at March 25, 2026.
(2) Mr. Bolton holds 56,500 shares for Iron Bay Fund, LP, of which he is a limited partner and currently the President, CEO, and Chief Investment Officer, which are held in a margin account.
(3) Shares reported include 20,000 shares of common stock pledged as security.
(4) Includes 4,769 shares held by Carriage Square, Ltd. over which shares Ms. Walsh shares voting and investment power by virtue of her ownership interest in Carriage Square, Ltd. and her officer and director roles held at such entity.
(5) Includes shares held by A. Loran Adams and Jane Ann Davis.
* Less than 1% of the outstanding common stock.
Section 16(a) of the Exchange Act requires that Directors and executive officers, and persons who beneficially own more than 10% of the Company's equity securities, file reports of ownership and reports of changes in ownership of the Company's outstanding equity securities. Based on a review of these reports filed by the Company's officers and Directors, the Company believes that its officers and Directors complied with all filing requirements under Section 16(a) of the Exchange Act during 2025, except that Mr. Kevin Bloomfield reported two transactions late on two Form 4s, executive officer Mr. Bradford Langs reported three transactions late on a Form 4, executive officer and director Mr. Litz Van Dyke reported three transactions late on a Form 4 and executive officer Ms. Wendy Bell reported one transaction late on a Form 4.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, and related SEC regulations enable our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this proxy statement in accordance with the SEC rules relating to compensation disclosure. The advisory vote on executive compensation is not a vote on the Company's general compensation policies. Section 14A of the Exchange Act requires the Company to hold the advisory vote on executive compensation at least once every three years. At the Company's 2023 Annual Meeting of Shareholders, shareholders voted on our say-on-pay frequency proposal indicating a preference for holding such advisory vote on executive compensation every year. Accordingly, the Board decided that the advisory vote on executive compensation would be held every year, at least until the next advisory say-on-pay frequency vote.
With assistance from its independent compensation consultant, the Nominating and Compensation Committee regularly reviews the compensation program for our NEOs to ensure they achieve the desired goal of striking a balance between recognition of recent achievements and aligning the interests of management on a longer-term basis with that of the Company's shareholders. The Company's compensation program is designed to offer competitive compensation to associates based on each individual's contribution to the Company's success. As such, the program provides a competitive compensation package to attract and retain capable associates. The independent compensation consultant assists the Nominating and Compensation Committee in this effort by annually recommending a peer group of financial institutions with reasonably similar market capitalization and business strategy to the Company and conducting an external market study for the Nominating and Compensation Committee using the peer group to assess the competitiveness of current pay opportunities for our NEOs. Please read the "Compensation Discussion & Analysis" beginning on page 13 for additional details about our executive compensation programs, including information about the fiscal year 2025 compensation of our NEOs.
We are asking our shareholders to indicate their approval of our NEO compensation as described in this proxy statement. The proposal, commonly known as "say-on-pay" proposal, is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the policies and practices described in this proxy statement.
Accordingly, the Board recommends that the shareholders approve the following advisory resolution:
"RESOLVED, that the shareholders approve, on an advisory basis, the compensation paid to the Company's NEOs as disclosed in the Company's proxy statement for the 2026 Annual Meeting of Shareholders pursuant to compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and the related narrative disclosure."
This vote is advisory and not binding on the Company, the Board or the Nominating and Compensation Committee. However, the Board and the Nominating and Compensation Committee value the opinions of our shareholders and will consider the outcome of this advisory vote when considering future executive compensation decisions. We anticipate that the next vote on a say-on-pay proposal will occur at the 2027 Annual Meeting of Shareholders.
The Company's compensation program is designed to offer competitive compensation to associates based on each individual's contribution to the Company's overall success. As such, the program provides a competitive compensation package to attract and retain capable associates.
The compensation and benefits program consists of salary, annual and long-term incentive opportunity, equity compensation, nonqualified deferred compensation plan, life, health and disability insurance and limited perquisites, such as a monthly automobile allowance, reimbursement of relocation and temporary housing expenses and legal expenses relating to employment agreement review, as appropriate, and modest tax gross-ups on the same, which the Company believes are important to attract the most qualified candidates. In addition, the Bank has an endorsement split dollar agreement under which, among other things, the Bank maintains life insurance on the lives of certain officers and provides, subject to certain terms and conditions set forth in the agreement, a defined, lump sum life insurance benefit upon the death of the officer while employed by the Bank to such officer's designated beneficiary, surviving spouse or estate. Each of the NEOs is a current participant in the endorsement split dollar agreement. The Company has a single health insurance plan for all officers and full-time associates who meet the eligibility requirements. The Company also provides a 401(k) and Profit Sharing Plan, group life insurance plan and short-term disability plan for officers and full-time associates. The Company has entered into employment or change of control severance agreements with its NEOs, which are further described under "Employment/Change of Control Severance Agreements".
The Nominating and Compensation Committee (the "Committee" for purposes of this "Executive Compensation" section) is responsible for administering the Company's overall compensation program and establishing the salaries, as well as annual and long-term incentive opportunities, for the Company's senior officers. In setting the compensation of the Company's senior officers, the Committee generally relies on the recommendations of the Chairman, CEO and the Board members' own significant personal knowledge of the compensation provided to other, similarly situated, executives in banking and other industries in the local area, as well as recommendations from the Committee's independent compensation consultant, which for the purposes of this "Executive Compensation" section beginning in 2025 is Arthur J. Gallagher & Co. ("Gallagher"), and prior to 2025 was Pearl Meyer & Partners, LLC ("Pearl Meyer"), each of whom maintain a significant focus on banking industry compensation. The Committee's independent compensation consultant annually recommends a peer group of financial institutions with reasonably similar market capitalization and business strategy to the Company and conducts an external market study for the Committee using the peer group to assess the competitiveness of current pay opportunities for our executive officers. For the 2025 compensation determinations, the peer companies consisted of twenty-four regional U.S. commercial banks ranging in asset size from approximately $2.6 to $9.3 billion. As of December 31, 2024, the Company had $4.7 billion in total assets versus the peer group median of $5.7 billion. The following financial institutions were included in the 2025 peer group:
Arrow Financial Corporation Glens Falls, NY
Bar Harbor Bankshares Bar Harbor, ME
Burke & Herbert Financial Services Corp. Alexandria, VA
C&F Financial Corporation Toano, VA
Capital City Bank Group, Inc. Tallahassee, FL
City Holding Company Charleston, WV
CNB Financial Corporation Clearfield, PA
Community Trust Bancorp, Inc. Pikeville, KY
First Community Bankshares, Inc. Bluefield, VA
First Financial Corporation Terre Haute, IN
Great Southern Bancorp, Inc. Springfield, MO
HomeTrust Bancshares, Inc. Asheville, NC
Mid Penn Bancorp, Inc. Millersburg, PA
MVB Financial Corp. Fairmont, WV
Orrstown Financial Services, Inc. Harrisburg, PA
Peoples Bancorp Inc. Marietta, OH
Peoples Financial Services Corp. Hallstead, PA
Primis Financial Corp. McLean, VA
Republic Bancorp, Inc. Louisville, KY
Shore Bancshares, Inc. Easton, MD
SmartFinancial, Inc. Knoxville, TN
Stock Yards Bancorp, Inc. Louisville, KY
Univest Financial Corporation Souderton, PA
Washington Trust Bancorp, Inc. Westerly, RI
In 2025, the Committee engaged Gallagher to assist in an evaluation of the competitiveness of the executive compensation program and to provide information on executive compensation at these peer banks, including market trends and developments in executive compensation. The Committee reviews each executive's performance and contribution to the overall Company goals, as well as recommendations of Gallagher, in determining the level of salary and other compensation for the coming year. The Committee considers the peer data to ensure that the Company's compensation programs are competitive and close to the median of market practices of the peer companies, although for certain positions the Company's cash and short-term incentive compensation remains slightly below the median of the peer group but within an overall competitive range.
When setting compensation for fiscal 2025 and in determining compensation policies, the Committee also took into account the results of the shareholder advisory vote on executive compensation that took place in May 2025. In that vote, which is advisory and non-binding, shareholders approved the compensation of our NEOs as disclosed in the proxy statement for the 2025 Annual Meeting of Shareholders. A substantial majority (92.6%) of votes cast approved the executive compensation program described in the Company's proxy statement for the 2025 Annual Meeting of Shareholders. The vote results were taken into consideration when setting the compensation for 2025 and are being taken into consideration by the Committee when setting the compensation for 2026. The Committee generally views the vote results as an indication that the Company has been generally effective in implementing its compensation philosophy and objectives. Nevertheless, since market practice and the Company's business needs continue to evolve, the Committee continually evaluates our compensation program, with input from the independent compensation consultant, and makes changes when warranted.
The Committee oversees an annual review of our compensation programs to determine whether such programs encourage excessive risk-taking by our associates. The most recent review was conducted in November 2025. Management and the Committee participated in the review, which included identification of the relevant compensation policies and practices, review of potential related risks, and analysis of risk-mitigating factors, including the Company's system of internal controls and oversight. All executive compensation incentive program payouts and awards are subject to annual reviews by the Company's internal audit department.
The Committee determined that the potential risks arising from our compensation programs are not reasonably likely to have a material adverse effect on the Company. In making this determination, the Committee took into account the structure of our compensation programs, the amount of cash compensation available to associates in the form of base salary, the involvement of the Committee in setting compensation for executive officers and in particular for those individuals who can commit the Company's capital or who manage the Company's risk, and the oversight of the Board in monitoring certain risk tolerances and internal controls.
The Company has entered into employment agreements with Mr. Van Dyke, Ms. Bell, Mr. Speare and Mr. Langs and a change of control severance agreement with Mr. Kallsen. Each of these agreements was originally entered into with the Bank and was amended and restated effective as of November 20, 2020 in connection with the holding company reorganization to add the Company as a party and make corresponding and other administrative changes. The terms of the agreements are substantially similar to each other as described below.
Van Dyke Employment Agreement
Mr. Van Dyke and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the "Van Dyke Agreement"), which had an initial term of two years, beginning on October 1, 2017. The employment term automatically renewed most recently on October 1, 2025 and will automatically renew on each subsequent two-year anniversary for an additional two-year term unless either party provides at least 60 days' advance notice of non-renewal.
Pursuant to the Van Dyke Agreement, Mr. Van Dyke's 2025 annual base salary was $705,000, subject to increase by the Company's Board at its discretion. He also receives $700 per month as an automobile allowance. Mr. Van Dyke is eligible to participate in the Company's annual bonus plan, associate benefit plans and programs on terms offered to similarly situated associates and is eligible to receive equity awards in the discretion of the Company's Board.
The Company may terminate Mr. Van Dyke's employment with or without cause (as defined in the Van Dyke Agreement), with or without notice. Mr. Van Dyke also may voluntarily terminate his employment with the Company at any time for Good Reason (as defined in the Van Dyke Agreement). In the event the Company terminates Mr. Van Dyke's employment without cause or Mr. Van Dyke terminates his employment for Good Reason, Mr. Van Dyke will receive any unpaid base salary, any annual bonus compensation earned and awarded but not yet paid, and any vested benefits (collectively, the "Accrued Obligations"). He will also receive a monthly severance payment equal to one-twelfth of his annual base salary for 18 months and continued associate health insurance coverage for 18 months. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in the Van Dyke Agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.
In the event the Company terminates Mr. Van Dyke's employment without cause or Mr. Van Dyke terminates his employment for Good Reason within two years after a Change of Control (as defined in the Van Dyke Agreement), Mr. Van Dyke will receive the Accrued Obligations, plus a lump sum severance payment equal to 2.99 times his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Van Dyke's highest annual bonus earned from the Company for the three years prior to termination. The Van Dyke Agreement provides for these Change of Control severance benefits on a "best net" approach, under which Mr. Van Dyke's Change of Control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code unless without such a reduction he would receive more after-tax compensation than with a reduction. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in the Van Dyke Agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.
In the event of a termination for Cause or due to Incapacity, Mr. Van Dyke will be entitled to receive his Accrued Obligations. If he dies while employed by the Company, the Company will pay Mr. Van Dyke's spouse, if his spouse survives him, or, if not, his estate, his Accrued Obligations and an amount equal to his base salary from the date of his death through the end of the month in which his death occurs.
Bell Employment Agreement
Ms. Bell and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the "Bell Agreement"). The terms of the Bell Agreement are substantially the same as the Van Dyke Agreement, except as follows. The initial term of the Bell Agreement was two years, beginning on July 24, 2017. The employment term automatically renewed most recently on July 24, 2025 and will automatically renew on each subsequent anniversary for an additional one-year term unless either party provides at least 60 days' advance notice of non-renewal.
Pursuant to the Bell Agreement, Ms. Bell's 2025 annual base salary was $429,936, subject to increase by the Company's Board in its discretion. She also receives $500 per month as an automobile allowance.
In the event the Company terminates Ms. Bell's employment without cause or Ms. Bell terminates her employment for Good Reason, in addition to the Accrued Obligations, she will also receive a monthly severance payment equal to one-twelfth of her annual base salary for 12 months and continued associate health insurance coverage for 12 months. In the event the Company terminates Ms. Bell's employment without cause or Ms. Bell terminates her employment
for Good Reason within two years after a Change of Control (as defined in the Bell Agreement), Ms. Bell will receive the Accrued Obligations, plus a lump sum severance payment equal to 24 months of her annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Ms. Bell's highest annual bonus earned from the Company for the three years prior to termination.
Speare Employment Agreement
Mr. Speare and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the "Speare Agreement"). The terms of the Speare Agreement are substantially the same as the Van Dyke Agreement, except as follows. The initial term of the Speare Agreement was one year, beginning on July 3, 2017. The employment term automatically renewed most recently on July 3, 2025 and will automatically renew on each subsequent anniversary for an additional one-year term unless either party provides at least 60 days' advance notice of non-renewal.
Pursuant to the Speare Agreement, Mr. Speare's 2025 annual base salary was $401,700, subject to increase by the Company's Board in its discretion. He also receives $500 per month as an automobile allowance.
In the event the Company terminates Mr. Speare's employment without cause or Mr. Speare terminates his employment for Good Reason, in addition to the Accrued Obligations, he will also receive a monthly severance payment equal to one-twelfth of his annual base salary for 12 months and continued associate health insurance coverage for 12 months. In the event the Company terminates Mr. Speare's employment without cause or Mr. Speare terminates his employment for Good Reason within two years after a Change of Control (as defined in the Speare Agreement), Mr. Speare will receive the Accrued Obligations, plus a lump sum severance payment equal to 24 months of his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Speare's highest annual bonus earned from the Company for the three years prior to termination.
Langs Employment Agreement
Mr. Langs and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the "Langs Agreement"). The terms of the Langs Agreement are substantially the same as the Van Dyke Agreement, except as follows. The initial term of the Langs Agreement was one year, beginning on June 19, 2017. The employment term automatically renewed most recently on June 19, 2025 and will automatically renew on each subsequent anniversary for an additional one-year term unless either party provides at least 60 days' advance notice of non-renewal.
Pursuant to the Langs Agreement, Mr. Langs' 2025 annual base salary was $578,448, subject to increase by the Company's Board in its discretion. He also receives $500 per month as an automobile allowance.
In the event the Company terminates Mr. Langs' employment without cause or Mr. Langs terminates his employment for Good Reason, in addition to the Accrued Obligations, he will also receive a monthly severance payment equal to one-twelfth of his annual base salary for 12 months and continued associate health insurance coverage for 12 months. In the event the Company terminates Mr. Langs' employment without cause or Mr. Langs terminates his employment for Good Reason within two years after a Change of Control (as defined in the Langs Agreement), Mr. Langs will receive the Accrued Obligations, plus a lump sum severance payment equal to 24 months of his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Langs' highest annual bonus earned from the Company for the three years prior to termination.
Kallsen Change of Control Severance Agreement
Mr. Kallsen and the Company are parties to an amended and restated change of control severance agreement, dated as of November 20, 2020 (the "Kallsen Agreement").
In the event the Company terminates Mr. Kallsen's employment without cause or Mr. Kallsen resigns for Good Reason, in each case within two years after a Change of Control (as defined in the Kallsen Agreement), Mr. Kallsen will receive the Accrued Obligations. If Mr. Kallsen executes and delivers to the Company a signed release and waiver of claims, Mr. Kallsen will also receive an amount equal to his annual base salary plus his average annual bonus payable from the Company for the three years prior to termination, payable over 12 months, and a lump sum
payment equal to continued associate health insurance coverage for 12 months. The Kallsen Agreement provides for these Change of Control severance benefits on a "best net" approach, under which Mr. Kallsen's Change of Control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code unless without such a reduction he would receive more after-tax compensation than with a reduction. Payment of these severance benefits is subject to satisfaction of other requirements, conditions, and limitations set forth in the Kallsen Agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.
In the event of a termination for cause or due to death or Incapacity within two years after a Change of Control, Mr. Kallsen will be entitled to receive any unpaid base salary and any vested benefits.
Base salaries provide appropriate fixed cash compensation necessary to attract and retain executive talent. Base salaries are intended to be competitive. The Committee reviews the base salaries of our NEOs on an annual basis as well as at the time of any promotion or other material change in responsibilities. In addition to engaging an independent compensation consultant, on base salaries, the Committee also considers the following when setting base salaries: (a) the individual executive's overall performance and contribution to the Company's performance, (b) overall Company performance and (c) the individual's base salary relative to other executive officers. The Committee approved base salary increases for each NEO in November 2024, effective January 1, 2025 based on merit and to maintain comparability to peers at the median level to ensure that the Company can attract and retain top executive talent.
Executive
2025 Base Salary ($)
2024 Base Salary ($)
% Increase
Litz H. Van Dyke
$705,000
$678,038
4.0%
Bradford N. Langs
$578,448
$556,200
4.0%
Wendy S. Bell
$429,936
$413,400
4.0%
Tony E. Kallsen
$365,976
$351,900
4.0%
Matthew M. Speare
$401,700
$386,250
4.0%
The Committee has adopted an annual incentive plan for the purpose of awarding annual bonuses to certain associates based upon the achievement of annual performance objectives established each year under the plan. This was implemented in order to position the Company to be competitive with its peers with respect to overall executive compensation. The annual incentive plan covers the Company's executive officers and certain senior vice presidents (each, a "Participant"), which includes all of the Company's NEOs. The goal of the annual incentive plan is to motivate Participants to maximize shareholder value by achieving performance while limiting risk appropriately and maintaining the safety and soundness of the Company.
The plan is an annual incentive plan that is approved each year with a performance year running from January 1 through December 31. The Committee oversees the administration of the plan, as well as plan design, determination of performance measures, goals and weightings and award payouts, partly based on input from the Company's CEO.
At the beginning of each year, the Committee develops a bonus template for the Company's CEO and the Company's CEO, in consultation with the Committee, develops a bonus template for each of the other Participants. The primary elements of each template are:
Percentage of base salary as target bonus opportunity,
Performance measures and goals selected from the Company's approved budget numbers for the year or other objective measures such as asset quality ratios, and
Weightings assigned to the selected performance measures.
Under the annual incentive plan, a Participant can earn a target bonus of a specific percentage of the Participant's base salary, with bonus payouts ranging from 0% to 100% (for performance up to target) and to 110% (for performance at or above 110% of target). For 2025, these target percentages for the NEOs were as follows:
CEO 65%
President & Chief Strategy Officer 60%
CFO 55%
Chief Operations Officer, Chief Credit Officer 52%
Performance measures under the plan are determined each year, in the categories of profitability, capital effectiveness and safety and soundness. The performance measures, goals and weightings assigned to them may change from year to year, and are typically the same for all Participants in any given year, although that is subject to change.
The amount of bonus earned by a Participant each year will depend on the Company's achievement with respect to the performance measure goals selected for that year, multiplied by the applicable weightings, multiplied by the Participant's base salary and percentage of base salary opportunity, within the established payout ranges.
Bonus amounts earned based on the Company's performance for a year are reviewed and certified by the Committee and paid to the Participant between January 1 and March 15 of the following year, generally shortly after the year's results have been finalized and the Company's earnings for the year have been announced. The plan has both short-term and long-term components, as the bonus amounts currently are paid approximately 67% in cash and 33% in shares of restricted common stock of the Company, with time-based vesting in three annual installments.
For 2025, the Committee selected the same performance measure goals and weightings for each of the Participants, including the Company's NEOs. The following table shows the performance measure goals for the annual incentive plan for 2025, as well as the weightings of these goals and the achievement with respect to each goal:
Performance Measure
Weighting
Target
Performance Goal
Maximum
Performance Goal
Performance Achieved
Percentage of
Performance Achieved
Discretionary Bonus Added
Total
Percentage of Target Payout
Core Earnings per Share(1)
25%
$1.49
$1.64
$1.39
11%
Core ROAA(1)
25%
0.72%
0.79%
0.66%
10%
Core ROAE(1)
25%
7.85%
8.64%
7.73%
15%
Core Efficiency(1)
25%
68.10%
62.00%
76.05%
4%
Weighted Average Bonus Amount Earned
40%
Total Bonus Amount Awarded
27%
67%
(1) Non-GAAP core earnings per share, core return on average assets ("ROAA"), core return on average equity ("ROAE") and core efficiency are calculated utilizing financial data on a GAAP basis and excluding all extraordinary items, whether positive or negative. Extraordinary items include items such as security gains and losses, other real estate owned gains or losses, contingent liabilities, acquisitions costs, gain on bank owned life insurance ("BOLI") death benefit, Modified Endowment Contract ("MEC") 10% penalty on BOLI, BOLI surrender tax effect, and BOLI 1035 exchange fees, net of tax.
Following the end of the year, the Committee reviewed the Company's performance with respect to these goals for 2025. Based on the Company's performance with respect to these goals, the aggregate percentage of performance achieved across all of the performance measures was 40%. In light of the impacts of the largest non-performing credit relationship on 2025 performance, the Committee determined it was appropriate to exercise discretion to pay additional bonus amounts for 2025. Interest income was negatively impacted by $26.1 million during 2025 due to these credits being on nonaccrual status. Additionally, there are ancillary negative impacts to net income as a result of these credits, including increased legal fees and FDIC insurance expense, which are not removed or adjusted as part of the core earnings per share calculation. The Company also collected $38.0 million in curtailment payments during 2025, which continued to lower the risk profile of the Company's largest non-performing credit relationship, but are not captured by these performance measures for 2025. The Board of Directors agreed with this recommendation and the bonus amounts were paid in February 2026, approximately 67% in cash and 33% in shares of restricted common stock of the Company, with time-based vesting in three annual installments. These shares of restricted common stock
were granted under the Carter Bankshares, Inc. Amended and Restated 2018 Omnibus Equity Incentive Plan, which is discussed further below. The non-discretionary bonus amounts earned by the NEOs for 2025 performance under this plan are reported as "Non-Equity Incentive Plan Compensation" for 2025 in the Summary Compensation Table, and the discretionary portion of the bonus amounts awarded to the NEOs are reported as "Bonus" in the Summary Compensation Table.
The Committee approved the long-term incentive program (the "LTIP") for certain associates, under which shares of restricted stock and performance units are to be awarded periodically under the Carter Bankshares, Inc. Amended and Restated 2018 Omnibus Equity Incentive Plan (the "Equity Plan"). The LTIP covers the Company's executive officers and certain executive vice presidents (each, a "Participant"), which includes all of the Company's NEOs. The goal of the LTIP is to promote leadership retention and management continuity, to reward management for strong sustained value creation and financial performance and to align the executives' interests with those of our shareholders through appropriately-sized grants of equity compensation. It is the Company's intent to maximize shareholder value by achieving performance while limiting risk appropriately and maintaining the safety and soundness of the Company by awarding shares of restricted stock and performance units.
The Committee granted the first awards under the LTIP in March 2022. Due to uncertainty with respect to the Company's financial performance in 2023, no awards under the LTIP were granted in 2023. In late 2023, the Committee approved the grant of LTIP awards for 2024, which were granted on January 5, 2024. Based on the prior recommendation of Pearl Meyer, these grants were divided as 70% performance-based as performance units and 30% retention-based as restricted shares. In January 2025, the Committee approved the grant of LTIP awards for 2025, which were granted on March 4, 2025. Based on the prior recommendation of Pearl Meyer, which took into account executive compensation at peer banks, including market trends and developments in executive compensation, these grants were divided as 50% performance-based as performance units and 50% retention-based as restricted shares.
The time-based restricted stock awards granted in 2024 cliff-vest on the fifth anniversary of the grant date, subject to accelerated vesting in certain circumstances. Based on an analysis of peer compensation trends, the time-based restricted stock awards granted in 2025 cliff-vest on the third anniversary of the grant date, subject to accelerated vesting in certain circumstances.
The performance units granted under the LTIP can be earned from 0% to 110% of target based on achieving the applicable performance goals and will be paid to the extent earned after the end of the three-year performance period, subject to accelerated vesting in certain circumstances.
Grant of 2025 Performance Units (2025-2027 Performance Period)
The 2025 performance units ("2025 PUs") are subject to four equally weighted performance-based goals established by the Committee: core return on average assets ("ROAA"), core efficiency ratio, total shareholder return ("TSR") and the non-performing assets ratio. Non-GAAP core efficiency is calculated utilizing financial data on a GAAP basis and excluding all extraordinary items, whether positive or negative. Extraordinary items include items such as security gains and losses, other real estate owned gains or losses, contingent liabilities, acquisitions costs, BOLI death benefit, MEC 10% penalty on BOLI, BOLI surrender tax effect, and BOLI 1035 exchange fees, net of tax.
Achievement with respect to these goals will be measured by comparing the Company's performance during the three-year performance period of January 1, 2025 to December 31, 2027 to a peer group consisting of the companies listed on the ABAQ index of publicly traded community banking companies on the first business day of the performance period. The level of achievement percentage that corresponds to the Company's percentile ranking for each performance goal will be applied to one-fourth of the target number of performance units. Failure to meet threshold performance during the performance period means no performance units for that performance goal will be earned. The level of achievement is calculated separately for each performance goal and the level of achievement for one performance goal does not impact the other performance goals.
The target performance percentile ranking of the Company as compared to peer group was maintained at the 67th percentile in the grant of the 2025 PUs. The Committee and the Board want the Company to be an upper tier performer within its ABAQ peer group as this will help to drive shareholder value and assure the Company's competitiveness on a longer term basis.
The performance goals under the 2025 PUs are summarized in the following table:
Performance Goal
Percentage of Target
Performance Units Subject to Performance Vesting
Percentile Ranking of Company vs Peer Group for Performance Period Percentage Earned Threshold % - Target % - Stretch%
Performance Goa1 1: ROAA
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 2: Core Efficiency Ratio
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 3: TSR
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 4: Non-Performing Assets Ratio
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
To the extent the performance criteria and service requirements are met, these performance units will vest on the payment date which is within 73 days following the end of the performance period. The Company will pay the performance units that have vested in shares of the Company's common stock.
Grant of 2024 Performance Units (2024-2026 Performance Period)
As previously described in the Company's proxy statement for the Company's 2025 Annual Shareholders' Meeting, the 2024 performance units ("2024 PUs") are subject to four equally weighted performance-based goals established by the Committee: return on average assets ("ROAA"), core efficiency ratio, total shareholder return ("TSR") and the non-performing assets ratio. Non-GAAP core efficiency is calculated utilizing financial data on a GAAP basis and excluding all extraordinary items, whether positive or negative. Extraordinary items include items such as security gains and losses, other real estate owned gains or losses, contingent liabilities, acquisitions costs, BOLI death benefit, MEC 10% penalty on BOLI, BOLI surrender tax effect, and BOLI 1035 exchange fees, net of tax. The Committee added the TSR metric as a performance goal to align driving shareholder value with management's long-term incentive. This is also a recommendation and best practice highlighted in executive compensation research by proxy advisory services, such as Glass Lewis and Institutional Shareholder Services ("ISS").
Achievement with respect to these goals will be measured by comparing the Company's performance during the three-year performance period of January 1, 2024 to December 31, 2026 to a peer group consisting of the companies listed on the ABAQ index of publicly traded community banking companies on the first business day of the performance period. The level of achievement percentage that corresponds to the Company's percentile ranking for each performance goal will be applied to one-fourth of the target number of performance units. Failure to meet threshold performance during the performance period means no performance units for that performance goal will be earned. The level of achievement is calculated separately for each performance goal and the level of achievement for one performance goal does not impact the other performance goals.
The target performance percentile ranking of the Company as compared to peer group was increased in the grant of the 2024 PUs to incent the NEOs to further drive Company performance to the 67th percentile, or a top third performer. The Committee and the Board want the Company to be an upper tier performer within its ABAQ peer group as this will help to drive shareholder value and assure the Company's competitiveness on a longer term basis.
The performance goals under the 2024 PUs are summarized in the following table:
Performance Goal
Percentage of Target Performance Units Subject to Performance Vesting
Percentile Ranking of Company vs Peer Group for Performance Period Percentage Earned Threshold % - Target % - Stretch%
Performance Goa1 1: ROAA
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 2: Core Efficiency Ratio
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 3: TSR
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 4: Non-Performing Assets Ratio
25%
54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
To the extent the performance criteria and service requirements are met, these performance units will vest on the payment date which is within 70 days following the end of the performance period. The Company will pay the performance units that have vested in shares of the Company's common stock.
As previously discussed in the Company's proxy statement for the Company's 2024 Annual Shareholders' Meeting, no awards under the LTIP were granted in 2023 due to uncertainty with respect to the Company's financial performance in 2023.
The Company grants equity compensation pursuant to the Equity Plan. The Equity Plan authorizes the issuance of up to 2,000,000 shares of common stock for awards to key associates and non-employee Directors of the Company and its subsidiaries as determined by the Committee, which has been appointed by the Board to administer the Equity Plan. The Equity Plan authorizes the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, stock awards, performance units and performance cash awards. Subject to accelerated vesting under certain circumstances, the Equity Plan requires a minimum vesting period of one year for awards subject to time-based conditions and a minimum performance period of one year for awards subject to achievement or satisfaction of performance goals. These minimums are applicable to awards other than those granted as part of a retainer for the service of non-employee Directors. With respect to executive compensation, the purpose of the Equity Plan is to provide incentives to certain key associates to align their personal interests with the long-term financial success of the Company and with growth in shareholder value, consistent with the Company's risk management practices.
In addition to the LTIP awards granted in February 2026, February 2025, and January 2024, in February 2026, March 2025, and February 2023, the Company granted restricted stock awards to several associates, including all of the NEOs, in connection with the annual incentive plan bonus payouts for 2025, 2024 and 2022 performance. The restricted stock vests in equal installments on each of the first, second and third anniversaries of the grant date, subject to accelerated vesting in certain circumstances.
As discussed above, the Committee anticipates granting future awards of restricted stock to associates, including the NEOs, in connection with the annual incentive plan and future awards of restricted stock and performance units to associates, including the NEOs, pursuant to the LTIP, and may also grant other equity awards under the Equity Plan as part of the Company's compensation program.
Stock options have not been a component of equity compensation awarded by the Company in recent years. The Company did not award stock options to any of the NEOs during 2025. Consequently, the Company does not have a formal policy on the timing or terms of awards of options in relation to the disclosure of material nonpublic information by the Company. For grants of other equity awards, such as restricted stock and performance units, the Committee schedules grants of equity awards at generally consistent times throughout the year. The Company does not time the release of material nonpublic information based on equity award grant dates for the purpose of affecting the value of executive compensation.
The Company has adopted insider trading policies and procedures governing the purchase, sale and/or other dispositions of its securities by directors, officers and associates, as well as their family members and entities controlled by them, or the Company itself. These policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and any listing standards applicable to the Company. The Company's Insider Trading Policy ("Insider Trading Policy") is filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025
The Insider Trading Policy applies to all directors, officers and all other associates of the Company and, among other goals, is designed to ensure that the Company's personnel bear the full risks and benefits of stock ownership. Under this policy, associates are strongly discouraged, and certain "covered persons" (as defined in the Insider Trading Policy), including directors and executive officers, are prohibited, from selling Company securities "short," trading in Company securities in or through a margin account or otherwise engaging in hedging transactions or speculative or short-term trading of Company securities. In addition, associates are strongly discouraged from entering into any transaction by which Company securities may be pledged as collateral to secure an obligation, and covered persons are prohibited from entering into such transactions (except for grandfathered pledging arrangements in place prior to September 1, 2019).
The Committee has adopted two clawback policies. The Dodd-Frank Clawback Policy, which became effective on October 2, 2023 and implements the requirements of Exchange Act Rule 10D-1 and Nasdaq's Listing Rule 5608, provides for the recoupment, under certain conditions, of certain incentive-based compensation from executive officers of the Company if the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements under the securities laws (an "accounting restatement"). The Supplemental Clawback Policy, which became effective on March 21, 2024, expands the coverage of the Dodd-Frank Clawback Policy to provide for the recoupment, under certain conditions, of cash-based and equity-based incentive compensation from the executive management team (which is a broader group than the Company's executive officers) in the event of an accounting restatement. The Supplemental Clawback Policy also provides for the recoupment, under certain conditions, of certain cash-based and equity-based incentive compensation from the executive management team and associates who have an employment or change of control severance agreement, cash incentive or equity award agreement or incentive or commission agreement if the executive or associate engages in detrimental conduct. Detrimental conduct means: (1) the commission of a criminal act by the executive or associate that constitutes a felony, (2) a violation by the executive or associate of federal or state securities laws, rules or regulations, and/or the rules of any exchange or association of which the Company is a member, (3) a violation by the executive or associate of the Company's Code of Conduct, as determined by the Company in its reasonable discretion, or (4) any misconduct or illegal activity by the associate or executive in performing the work for which incentive compensation covered by the policy is paid, as determined by the Company in its reasonable discretion.
The Nominating and Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis included above. Based upon such review, the related discussions and such other matters deemed relevant and appropriate by the Committee, the Committee has recommended to the Board the inclusion of the Compensation Discussion & Analysis in this proxy statement.
Members of the Nominating and Compensation Committee
Gregory W. Feldmann, Chair Kevin S. Bloomfield
Jacob A. Lutz, III Curtis E. Stephens
The Company determined that the 2025 annual total compensation of the median compensated associate of all its associates, other than the CEO, as of December 31, 2025 was $59,153; the CEO's 2025 annual total compensation was
$1,355,859; and the ratio of these amounts was 23:1.
The Company identified a new median associate for 2025 due to changes in the Company's overall cost-center structure and related associate composition since 2024. To do this, we utilized the following methodology. As of December 31, 2025, the Company's total population consisted of 690 associates, all of whom work in the United States. This population consisted of all of the Company's full-time and part-time associates. To identify the median compensated associate, we used a consistently applied compensation measure defined as gross wages as reported on each associate's 2025 Internal Revenue Service ("IRS") Form W-2. We further annualized pay for those individuals not employed for a full year in 2025, but who were employed as of December 31, 2025.
Once we identified our median compensated associate, we calculated the median compensated associate's and our CEO's 2025 annual total compensation in accordance with the requirements of the Summary Compensation Table.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated associate and calculating the pay ratio based on that associate's annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Name and Principal Position
Year
Salary ($)
Bonus ($)(1)
Stock Awards ($)(2)
Non-equity
Incentive Plan Compensation ($)(3)
All Other Compensation ($)(4)
Total ($)
Litz H. Van Dyke 2025
$703,114
$122,648
$300,030
$183,300
$46,767
$1,355,859
CEO of the Company and the Bank 2024
$676,847
$ 90,623
$258,316
$237,313
$44,813
$1,307,912
2023
$644,618
$ 96,863
-
-
$43,149
$ 784,630
Bradford N. Langs 2025
$577,788
$ 92,903
$160,036
$138,828
$50,719
$1,020,274
President and Chief Strategy 2024
2023
$555,167
$514,282
$ 74,337
$ 77,250
$154,512
-
$194,670
-
$47,325
$45,001
$ 1,026,011
$ 636,533
Wendy S. Bell 2025
$429,718
$ 63,289
$122,020
$ 94,586
$37,104
$ 746,717
CFO of the Company; Senior Executive 2024
2023
$413,554
$389,724
$ 55,657
$ 58,500
$117,015
-
$144,690
-
$48,708
$46,359
$ 779,624
$ 494,583
Tony E. Kallsen 2025
$365,444
$ 50,946
$ 80,018
$ 76,123
$35,716
$ 608,247
Senior Executive Vice President and Chief 2024
2023
$351,994
$339,861
$ 47,026
$ 51,000
$ 74,813
-
$123,165
-
$33,863
$34,943
$ 630,861
$ 425,804
Matthew M. Speare 2025
$401,063
$ 55,909
$118,034
$ 83,554
$41,877
$ 700,437
Senior Executive Vice President and Chief 2024
2023
$386,369
$374,667
$ 51,622
$ 56,250
$112,517
-
$135,188
-
$40,087
$38,310
$ 725,783
$ 469,227
Fiscal 2023 - 2025 The table below reflects compensation received by each NEO.
Officer of the Bank
Vice President and CFO of the Bank
Credit Officer of the Bank
Operations Officer of the Bank
(1) For 2025, amounts reflect the discretionary amount of the bonus the Committee determined to pay in addition to the bonus amount that was earned under the annual incentive plan for 2025 performance and include both the portion of the discretionary bonus paid in cash and the portion paid in shares of restricted stock. For 2024, amounts reflect the discretionary amount of the bonus the Committee determined to pay in excess of the bonus amount earned under the annual incentive plan for 2024 performance and include both the portion of the discretionary bonus paid in cash and the portion paid in shares of restricted stock. For 2023, the Committee recommended to the full Board of Directors, and the full Board of Directors approved, granting each participant in the annual incentive plan a discretionary flat bonus equal to 15% of annual salary to reflect the outstanding work they had completed in 2023, which included strong loan growth, successful expansion in high-growth markets and successful management of liquidity and deposit stability in a challenging market environment, although many of positive effects of this outstanding work were muted in the Company's financial performance for 2023 by the impacts of the single large non-performing credit relationship.
(2) Stock awards for 2025 and 2024 consist of time-based restricted stock and performance-based unit awards granted under the Company's LTIP. The performance-based unit awards vest only if, and to the extent earned based on performance achievement over a three-year performance period ending December 31, 2027 and December 31, 2026, respectively, and satisfaction of additional service requirements.
All stock and unit awards are reflected at their grant date fair value, as determined pursuant to Accounting Standards Codification - Topic 718, Stock Compensation ("ASC 718"). Prior to September 1, 2023, we used the closing price of our stock to determine the grant date fair value. Beginning September 1, 2023, we use a 90 trading day look-back period to estimate the average stock price to resolve issues of rapid stock price fluctuations. The amounts reflected for performance-based unit awards reflect the grant date assumption that we will achieve the required performance goals at target levels.
The following table provides the grant date fair value of the performance-based unit awards granted during 2025 and 2024 assuming stretch (or maximum) achievement:
Name
2025 Stretch Payout
2024 Stretch Payout
Litz H. Van Dyke
$165,000
$198,891
Bradford N. Langs
$ 88,000
$118,965
Wendy S. Bell
$ 67,100
$ 90,090
Tony E. Kallsen
$ 44,000
$ 57,596
Matthew M. Speare
$ 64,900
$ 86,625
(3) The amounts in this column for 2025 and 2024 reflect the non-discretionary bonus amounts earned for 2025 and 2024 performance under the annual incentive plan and include both the portion of the bonus paid in cash and the portion paid in shares of restricted stock that were granted in February 2026 and March 2025, respectively. In each case, the cash portion and the portion paid in restricted shares of these bonus amounts were paid in the year following the year in which the performance criteria was achieved.
(4) The amount of compensation properly categorized in this column, including perquisites and other personal benefits that total more than
$10,000, is listed in the table below for 2025 for each NEO.
Name
Medical
401(k)
Matching Contributions
Disability Insurance
Life Insurance Premiums
Car Allowance
Gross Ups Car Allowance
Total
Litz H. Van Dyke
$14,719
$14,000
$1,642
$4,224
$8,400
$3,782
$46,767
Bradford N. Langs
$22,319
$14,000
$1,642
$4,224
$6,000
$2,534
$50,719
Wendy S. Bell
$ 8,688
$14,000
$1,642
$4,224
$6,000
$2,550
$37,104
Tony E. Kallsen
$ 8,688
$14,000
$1,512
$2,982
$6,000
$2,534
$35,716
Matthew M. Speare
$14,719
$14,000
$1,642
$2,982
$6,000
$2,534
$41,877
The table below reflects information regarding the annual and long-term incentive plan opportunities granted to the NEOs during or for the year ended December 31, 2025.
Threshold
Target
Maximum
Threshold
Target
Maximum
Units(3)
Awards(4)
Name
Grant Date
($)
($)
($)
(#)
(#)
(#)
(#)
($)
Litz H. Van Dyke
Annual Incentive Plan
N/A
$ -
$458,250
$504,075
-
-
-
-
-
Time-Based Restricted Stock
2/27/2025
-
-
-
-
-
-
8,279
$150,015
Performance Units
2/27/2025
-
-
-
1,655
8,279
9,106
-
$150,015
Bradford N. Langs
Annual Incentive Plan
N/A
$ -
$347,069
$381,776
-
-
-
-
-
Time-Based Restricted Stock
2/27/2025
-
-
-
-
-
-
4,416
$80,018
Performance Units
2/27/2025
-
-
-
883
4,416
4,857
-
$80,018
Wendy S. Bell
Annual Incentive Plan
N/A
$ -
$236,465
$260,111
-
-
-
-
-
Time-Based Restricted Stock
2/27/2025
-
-
-
-
-
-
3,367
$61,010
Performance Units
2/27/2025
-
-
-
673
3,367
3,704
-
$61,010
Tony E. Kallsen
Annual Incentive Plan
N/A
$ -
$190,308
$209,338
-
-
-
-
-
Time-Based Restricted Stock
2/27/2025
-
-
-
-
-
-
2,208
$40,009
Performance Units
2/27/2025
-
-
-
441
2,208
2,429
-
$40,009
Matthew M. Speare
Annual Incentive Plan
N/A
$ -
$208,884
$229,772
-
-
-
-
-
Time-Based Restricted Stock
2/27/2025
-
-
-
-
-
-
3,257
$59,017
Performance Units
2/27/2025
-
-
-
651
3,257
3,582
-
$59,017
(1) Reflects the target and maximum bonus that each NEO could earn for 2025 performance under the annual incentive plan. The actual amounts earned by the named executive officers for 2025 performance under the annual incentive plan, which were paid partly in cash and partly in shares of restricted stock with a three-year vesting period, are reported in the "Non-Equity Incentive Plan Compensation" column for 2025 in the Summary Compensation Table for the non-discretionary amount and in the "Bonus" column for 2025 for the discretionary amount.
(2) Amounts reflected in these columns represent the number of PUs granted to our named executive officers during 2025 under the LTIP, pursuant to which our named executive officers could earn from 0% to 110% in the target number of PUs, based on the achievement over a three-year performance period ending December 31, 2027 of ROAA, core efficiency ratio, TSR, and the non-performing assets ratio for the Company compared to a peer group. Any PUs earned based on the achievement with respect to such goals will vest on the payment date, which is within 73 days following December 31, 2027, and be paid in shares of the Company's common stock.
(3) Amounts reflected in this column represent the number of time-vesting shares of restricted stock that were granted to each of our named executive officers during 2025 under the LTIP.
(4) Amounts reflected in this column represent the grant date fair value of 2025 awards of restricted stock and PUs granted to each of our named executive officers, calculated in accordance with ASC Topic 718 based on a 90-trading day look-back average closing stock price, which was
$18.12. The amounts shown for the PUs are based on the probable outcome of such awards on the grant date, which was achievement at the target level.
Disclaimer
Carter Bankshares Inc. published this content on April 15, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 15, 2026 at 15:11 UTC.