Carter Bankshares, Inc. Announces Major Nonperforming Loan Sale and Financial Impact

Key Points from the 8-K Filing

• Transaction Overview: Carter Bankshares, Inc. (NASDAQ: CARE) has completed a significant transaction involving the sale of nonperforming loans.
• Cash Consideration: The company received \$289.48 million in cash for the transaction.
• Loan Details: Prior to the sale, the nonperforming loans had an aggregate principal amount of \$209.48 million, all were on nonaccrual status, and a specific reserve of \$18.04 million was recorded as of December 31, 2025.
• Financial Impact (Pro Forma):
  • If the transaction had occurred as of December 31, 2025, Carter Bankshares would have reported:
    • Total assets of approximately \$4.95 billion (up from \$4.85 billion).
    • Total loans of approximately \$3.67 billion (down from \$3.88 billion).
    • Allowance for credit losses as a percentage of total loans: 1.46% (down from 1.84%).
    • Total nonperforming loans reduced to \$29.96 million (from \$243.98 million).
    • Nonperforming loans as a percentage of total loans: 0.82% (down from 6.29%).
• Tangible Book Value Impact: The company estimates a favorable impact to tangible book value per common share of approximately \$3.49 per share.
• Future Disclosure: Additional details on the transaction’s impact will be provided in the Q1 2026 earnings release and Form 10-Q.

Important Information for Shareholders

• Price Sensitivity: The sale of nonperforming loans and the immediate reduction in credit risk could be highly price sensitive. It marks a substantial improvement in asset quality, with nonperforming loans dropping from \$243.98 million to \$29.96 million.
• Balance Sheet Improvement: The reduction in the allowance for credit losses and nonperforming loans suggests a healthier loan portfolio and improved risk profile, which could positively affect investor sentiment and share price.
• Tangible Book Value Increase: The estimated increase of \$3.49 per share in tangible book value is a material positive for shareholders.
• Forward-Looking Statements: The reported pro forma financial data are unaudited and based on reasonable assumptions as of the filing date. Actual results may differ materially, especially depending on future market conditions and accounting treatments.
• Risk Factors: The company cautions that future results are subject to risks including market interest rates, changes in accounting policies (such as CECL adoption), loan portfolio concentration, real estate collateral values, and other risks detailed in the Annual Report and SEC filings.

Additional Notes

• The company is not an emerging growth company, and the filing is not an amendment.
• The common stock continues to trade under the symbol CARE on the NASDAQ Global Select Market.
• No pre-commencement tender offer or soliciting material is associated with this 8-K filing.

Potential Market Impact

This transaction represents a material event for Carter Bankshares, Inc., with the potential to significantly improve its financial condition, lower credit risk, and enhance shareholder value. Investors should monitor the upcoming Q1 2026 earnings release and Form 10-Q for further details and confirmation of the pro forma impacts.

Disclaimer

The information provided herein is based on the 8-K filing by Carter Bankshares, Inc. dated March 26, 2026. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those projected. Investors are encouraged to review all official filings and consult their financial advisors before making investment decisions.

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