# EDGAR Filing Document

**Accession Number:** 0001829576
**File Stem:** 0001829576-26-000036
**Filing Date:** 2026-4
**Character Count:** 66051
**Document Hash:** ac9fecbb522de162466b886d4bf90866
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829576-26-000036.hdr.sgml**: 20260423

**ACCESSION NUMBER**: 0001829576-26-000036

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 12

**CONFORMED PERIOD OF REPORT**: 20260423

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260423

**DATE AS OF CHANGE**: 20260423

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Carter Bankshares, Inc.
- **CENTRAL INDEX KEY:** 0001829576
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATIONAL COMMERCIAL BANKS [6021]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 853365661
- **STATE OF INCORPORATION:** VA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39731
- **FILM NUMBER:** 26885662

**BUSINESS ADDRESS:**
- **STREET 1:** 1300 KINGS MOUNTAIN ROAD
- **CITY:** MARTINSVILLE
- **STATE:** VA
- **ZIP:** 24112
- **BUSINESS PHONE:** 276-656-1776

**MAIL ADDRESS:**
- **STREET 1:** 1300 KINGS MOUNTAIN ROAD
- **CITY:** MARTINSVILLE
- **STATE:** VA
- **ZIP:** 24112

?xml version='1.0' encoding='ASCII'? care-20260423

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20429**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **April 23, 2026**

**CARTER BANKSHARES, INC.**

(Exact name of registrant as specified in its charter)

Virginia 001-39731 85-3365661 <br> (State or other jurisdictionof incorporation) (Commissionfile number) (IRS EmployerIdentification No.)

1300 Kings Mountain Road, Martinsville, Virginia 24112

(Address of Principal Executive Offices) (Zip Code)

(276) 656-1776

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading Symbol(s)</u>** | **<u>Name of each exchange on which<br>registered</u>** |
| Common Stock, $1.00 par value | CARE | NASDAQ Global Select Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

**ITEM 2.02.**&nbsp;&nbsp;&nbsp;&nbsp;**RESULTS OF OPERATIONS AND FINANCIAL CONDITION.**

On April 23, 2026, Carter Bankshares, Inc. announced by press release its financial results for the three months ended March 31, 2026. A copy of the press release is attached hereto as <u>[Exhibit 99.1](care-1q26_ex991xer.htm)</u>. The information contained in this Report on Form 8-K is furnished pursuant to Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

**ITEM 9.01.**&nbsp;&nbsp;&nbsp;&nbsp;**FINANCIAL STATEMENTS AND EXHIBITS.**

&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits.

**<u>Exhibit No.</u>**

<u>[Exhibit 99.1](care-1q26_ex991xer.htm)</u>&nbsp;&nbsp;&nbsp;&nbsp;<u>[Press Release announcing](care-1q26_ex991xer.htm)[t](care-1q26_ex991xer.htm)[h](care-1q26_ex991xer.htm)[e](care-1q26_ex991xer.htm)[First](care-1q26_ex991xer.htm)[Quarter 202](care-1q26_ex991xer.htm)[6](care-1q26_ex991xer.htm)[Financial Results](care-1q26_ex991xer.htm)[.](care-1q26_ex991xer.htm)</u>

**Important Note Regarding Forward-Looking Statements** 

*This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements made in Mr. Van Dyke's quotations and may include statements relating to our financial condition, market conditions, results of operations, plans, including our strategic plan, brand strategy, and guiding principles and the anticipated results of the foregoing, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, loan pipeline and nonaccrual and nonperforming loans. Forward looking statements are typically identified by words or phrases such as "will likely result," "expect," "anticipate," "estimate," "forecast," "project," "intend," "believe," "assume," "strategy," "trend," "plan," "outlook," "outcome," "continue," "remain," "potential," "opportunity," "comfortable," "current," "position," "maintain," "sustain," "seek," "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond the Company's control. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Actual results may differ significantly from those expressed in or implied by these forward-looking statements. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements including, but not limited to the effects of: market interest rates and the impacts of market interest rates on economic conditions, customer behavior, and the Company's net interest margin, net interest income, funding costs and its deposit, loan and securities portfolios; inflation, market and monetary fluctuations; changes in trade policies, tariffs, monetary and fiscal policies and laws of the U.S. government and the related impacts on economic conditions and financial markets, and changes in policies of the Federal Reserve, FDIC and U.S. Department of the Treasury; changes in accounting policies, practices, or guidance, for example, our adoption of Current Expected Credit Losses ("CECL") methodology, including potential volatility in the Company's operating results due to application of the CECL methodology; cyber-security threats, attacks or events; rapid technological developments and changes, including emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action or increase cybersecurity threats; our ability to resolve our nonperforming assets and our ability to secure collateral on loans that have entered nonaccrual status due to loan maturities and failure to pay in full; changes in the Company's liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate ("CRE") loans, and the potential impacts of changes in market conditions on the value of real estate collateral; increased delinquency and foreclosure rates on CRE loans; an insufficient allowance for credit losses; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, war and other geopolitical conflicts or public health events (such as pandemics), and of any governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on macroeconomic conditions, the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth; a change in spreads on interest-earning assets and interest-bearing liabilities;* 

------

*regulatory supervision and oversight, including our relationship with regulators and any actions that may be initiated by our regulators; legislation affecting the financial services industry as a whole, and the Company and the Bank, in particular and changes impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies; the outcome of pending and future litigation and/or governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating acquired operations will be more difficult, disruptive or more costly than anticipated; the soundness of other financial institutions and any indirect exposure related to large bank failures and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with those failed banks may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships with; material increases in costs and expenses; reliance on significant customer relationships; general economic or business conditions, including unemployment levels, supply chain disruptions, slowdowns in economic growth, government shutdowns and geopolitical instability and tensions; significant weakening of the local economies in which we operate; changes in customer behaviors, including consumer spending, borrowing and saving habits; changes in deposit flows and loan demand; our failure to attract or retain key associates; expansions or consolidations in the Company's branch network, including that the anticipated benefits of the Company's branch acquisitions or the Company's branch network optimization project are not fully realized in a timely manner or at all; deterioration of the housing market and reduced demand for mortgages; and re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses. Many of these factors, as well as other factors, are described in our filings with the Securities and Exchange Commission, including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. All risk factors and uncertainties described herein and therein should be considered in evaluating the Company's forward-looking statements. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events are expressed in or implied by a forward-looking statement may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update, revise or clarify any forward-looking statement to reflect developments occurring after the statement is made, except as required by law.*

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| |
|:---|
| **CARTER BANKSHARES, INC.** |
| (Registrant) |

---

---

| | | |
|:---|:---|:---|
| Date: April 23, 2026 | By: | /s/ Wendy S. Bell |
|  | Name: | Wendy S. Bell |
|  | Title: | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

FOR IMMEDIATE RELEASE – April 23, 2026

**Carter Bankshares, Inc. Announces First Quarter 2026 Financial Results**

Martinsville, VA, April 23, 2026 – Carter Bankshares, Inc. (the "Company") (NASDAQ:CARE), the holding company of Carter Bank (the "Bank") today announced quarterly net income of $85.8 million, or $3.88 diluted earnings per share ("EPS"), for the first quarter of 2026 compared to net income of $8.5 million, or $0.38 diluted EPS, for the fourth quarter of 2025 and net income of $9.0 million, or $0.39 diluted EPS, for the first quarter of 2025. Net interest income was $35.9 million for the first quarter of 2026, $34.6 million for the fourth quarter of 2025, and $30.1 million for the first quarter of 2025. Pre-tax pre-provision income<sup>1</sup> was $75.9 million for the first quarter of 2026, $8.8 million for the fourth quarter of 2025 and $9.0 million for the first quarter of 2025.

On March 26, 2026, the Bank completed the sale (the "Transaction") of all loans, subsequently reduced to judgments related to various entities in which James C. Justice, II has an interest (such loans, subsequently reduced to judgments, the "Loans"). The Transaction was completed as an absolute, "as-is, where-is" sale to an unaffiliated third party.

The Company received consideration of $289.5 million in cash in the Transaction. Immediately prior to the Transaction, the Loans had an outstanding aggregate principal amount of $209.5 million, all of the Loans were nonperforming and on nonaccrual status, and the Company had recorded a specific reserve with respect to the Loans of $18.0 million as of December 31, 2025.

**Transaction Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Received consideration of $289.5 million in cash in the Transaction during the quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recognized a net gain on the Transaction of $80.0 million, comprised of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ $65.0 million gain on the Transaction; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ $15.0 million net recovery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Released $18.0 million of specific reserves related to the Loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Transaction was accretive to diluted earnings per share by $3.50 for the quarter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Transaction increased each of book value per share and tangible book value per share by $3.49.

**Financial Highlights for the Three Months Ended March 31, 2026**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total portfolio loans decreased $151.1 million at March 31, 2026 from December 31, 2025 due to the Transaction, partially offset by net loan growth during the first quarter of $58.4 million, or 6.1%<sup>7</sup> on an annualized basis, and increased $41.0 million, or 1.1% from March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net interest income totaled $35.9 million, an increase of $1.3 million, or 3.8% compared to the prior quarter, and an increase of $5.8 million, or 19.2% compared to the prior year quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net interest margin increased 15 basis points to 3.07% for the first quarter of 2026, compared to 2.92% for the prior quarter and increased 39 basis points compared to the prior year quarter;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nonperforming loans ("NPLs") decreased significantly by $220.0 million to $24.0 million at March 31, 2026 compared to December 31, 2025 due to the Transaction. NPLs to total portfolio loans were 0.64% at March 31, 2026, 6.29% at December 31, 2025 and 7.09% at March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The allowance for credit losses to total portfolio loans was 1.41% at March 31, 2026, compared to 1.84% at December 31, 2025 and 1.99% at March 31, 2025, primarily reflecting the release of specific reserves of $18.0 million related to the Loans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The efficiency ratio was 29.01% for the quarter ended March 31, 2026, compared to 77.84% and 75.71% for the quarters ended December 31, 2025 and March 31, 2025, respectively. The improvement was primarily driven by the gain on the Transaction, which increased noninterest income for the quarter. The adjusted efficiency ratio (non-GAAP)<sup>5</sup> was 72.66%, 76.85%, and 78.67% for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

"We are very pleased to report the successful resolution of our largest nonperforming credit relationship during the first quarter of 2026," stated Litz H. Van Dyke, Chief Executive Officer. "This Transaction meaningfully strengthened our balance sheet and favorably increased tangible book value by $3.49 per share, while also improving key financial ratios. It represents an important milestone for the Company and positions us well for continued growth."

Van Dyke added, "We continued to deliver strong operating performance during the quarter, highlighted by margin expansion and solid loan growth across our footprint. Annualized loan growth of 6.1%<sup>7</sup>, net of the Transaction, reflects continued momentum in our commercial and small business lending platforms, supported by a healthy pipeline and increasing traction in commercial and industrial lending. We also expect a continued tailwind from prior construction lending commitments, which are anticipated to fund over the next 12 to 18 months as projects progress. Our balance sheet remains slightly liability sensitive, positioning us to benefit from potential Federal Reserve interest rate reductions, which we expect would further support margin expansion, particularly given the short-term nature of our certificates of deposit ("CD") portfolio."

**Operating Highlights**

***Credit Quality***

Credit quality metrics for the quarter were favorably impacted by the Transaction, driving meaningful improvements in nonperforming assets and overall credit quality trends.

During the quarter, the Company recognized a recovery for credit losses of $33.9 million and a recovery for unfunded commitments of $0.2 million, primarily reflecting the release of previously established specific reserves of $18.0 million, as well as a $15.0 million net recovery associated with the Loans, in each case related to the Transaction. As a result, the Company recorded a net benefit to the recovery for credit losses, contributing to a decline in the allowance for credit losses to total portfolio loans. The net benefit to the recovery for credit losses was a significant driver of earnings for the quarter.

At March 31, 2026, nonperforming assets declined to $27.4 million compared to $244.1 million at December 31, 2025 and $262.0 million at March 31, 2025, primarily reflecting the resolution of the aforementioned credit relationship. Nonperforming loans decreased to $24.0 million at March 31, 2026, from $244.0 million at December 31, 2025 and $261.4 million at March 31, 2025. The ratio of nonperforming assets to total portfolio loans plus other real estate owned ("OREO") improved to 0.73% at March 31, 2026, compared to 6.29% at December 31, 2025 and 7.10% at March 31, 2025.

------

The allowance for credit losses to total portfolio loans was 1.41% at March 31, 2026 compared to 1.84% at December 31, 2025 and 1.99% at March 31, 2025, reflecting the release of previously established reserves of $18.0 million related to the Loans. The allowance for credit losses to nonperforming loans increased to 219.03% at March 31, 2026 compared to 29.30% at December 31, 2025 and 28.12% at March 31, 2025, driven by the significant reduction in nonperforming loans.

The Company recognized net recoveries of $14.9 million for the quarter ended March 31, 2026, compared to net charge-offs of $0.1 million for the fourth quarter of 2025 and $0.1 million for the first quarter of 2025. Net recoveries (annualized) to average portfolio loans, were 1.55% for the quarter ended March 31, 2026 compared to net charge-offs of 0.01% in each of the fourth quarter of 2025 and the first quarter of 2025.

Excluding the impact of the Transaction, underlying credit quality trends remained relatively stable during the first quarter of 2026.

***Net Interest Income and Margin***

Net interest income (GAAP) for the quarter ended March 31, 2026 totaled $35.9 million, representing an increase of $1.3 million from net interest income of $34.6 million in the prior quarter and an increase of $5.8 million from net interest income of $30.1 million in the prior year quarter. Net interest income, on an FTE basis<sup>4</sup> (non-GAAP) totaled $36.1 million for the quarter ended March 31, 2026, representing an increase of $1.3 million, or 3.8%, compared to the quarter ended December 31, 2025, and an increase of $5.8 million, or 19.0% compared to the quarter ended March 31, 2025.

The linked-quarter increase in net interest income, on an FTE basis<sup>4</sup> (non-GAAP) was primarily driven by a 12 basis point decline in funding costs and a six basis point increase in the yield on average interest-earning assets. The year-over-year increase was attributable to a 41 basis point decline in funding costs and a seven basis point increase in average interest-earning assets yields.

Net interest income during the first quarter of 2026 benefited from lower rates paid on average interest-bearing liabilities and higher average loan balances compared to both the prior quarter and the prior year quarter. These positive impacts were partially offset by declines in both average balances of and yields on investment securities.

Net interest margin was 3.07% for the quarter ended March 31, 2026 compared to 2.92% for the prior quarter and 2.68% for the quarter ended March 31, 2025. On an FTE basis<sup>4</sup> (non-GAAP) net interest margin was 3.08% compared to 2.93% and 2.70% for the prior quarter and prior year quarter, respectively.

During the first quarter of 2026, interest-bearing funding costs declined compared to both the prior quarter and prior year quarter, primarily due to continued reductions in funding costs, as well as stabilization in deposit pricing, partially reflecting the broader interest rate environment.

***Noninterest Income***

Noninterest income for the quarter ended March 31, 2026 totaled $71.0 million, increasing $65.7 million from the prior quarter and $64.1 million from the prior year quarter. The increase was primarily driven by the $65.0 million gain on the Transaction, which is considered non-core in nature and not indicative of the Company's ongoing operating performance.

Compared to the quarter ended March 31, 2025, insurance commissions increased $0.6 million, while other noninterest income decreased $2.0 million, primarily reflecting favorable period-end adjustments within insurance commissions and the impact of a $1.9 million gain on a bank owned life insurance ("BOLI") death benefit recognized in the first quarter of 2025, respectively.

------

***Noninterest Expense***

Noninterest expense for the quarter ended March 31, 2026 totaled $31.0 million, relatively unchanged compared to the prior quarter and increased $3.0 million compared to the prior year quarter.

Compared to the prior quarter, the quarter reflected several changes across expense categories. Salaries and employee benefits decreased $1.1 million, primarily due to lower base salaries resulting from seasonal expenses in the prior quarter and two less working days in the first quarter, medical costs, and deferred compensation expense, partially offset by higher incentive compensation. Data processing increased $0.4 million and occupancy expenses increased $0.5 million, primarily reflecting higher costs associated with new and existing service agreements, software licenses, maintenance contracts, and related infrastructure investments. Other noninterest expense increased $0.7 million primarily due to a write-down of $0.6 million on one closed office that was transferred to OREO during the first quarter of 2026.

Compared to the quarter ended March 31, 2025, salaries and employee benefits increased $1.3 million, other noninterest expense increased $0.5 million, data processing expenses increased $0.4 million, occupancy expense increased $0.4 million and professional and legal fees increased $0.3 million.

The increase in salaries and employee benefits was primarily driven by higher incentive compensation, increased medical costs and annual merit increases, partially offset by higher deferred costs on loan originations. Other noninterest expense increased primarily due to the aforementioned $0.6 million write-down on one closed office that was transferred to OREO during the first quarter of 2026. Data processing expenses increased due to inflationary cost pressures and higher costs associated with new and existing service agreements implemented in early 2026. The increase in occupancy expense was primarily attributable to maintenance contracts entered into during the first quarter of 2026 and related infrastructure investments. Professional and legal fees increased primarily due to costs associated with the Transaction and higher expenses related to the management of special assets.

***Financial Condition***

Total assets decreased $52.7 million to $4.8 billion at March 31, 2026, compared to December 31, 2025. The decrease was primarily driven by a $151.1 million decline in portfolio loans, largely reflecting the Transaction, partially offset by net loan growth during the first quarter of $58.4 million. This decrease was partially offset by an increase in cash and due from banks of $123.2 million, as balances held at the Federal Reserve Bank increased due to the excess proceeds from the Transaction in the first quarter of 2026.

The allowance for credit losses decreased $19.0 million during the first quarter, primarily reflecting the release of the $18.0 million of specific reserve related to the Loans. Available-for-sale investment securities decreased $29.5 million, primarily due to normal paydowns, calls and sales, as well as changes in unrealized losses, partially offset by purchases. These securities represented 13.8% of total assets at March 31, 2026, compared to 14.3% at December 31, 2025. Federal Home Loan Bank ("FHLB") stock declined $8.4 million in line with lower borrowing levels.

On the funding side, FHLB borrowings decreased $178.5 million during the first quarter, reflecting the repayment of borrowings utilizing proceeds from the Transaction. Total deposits increased $24.4 million to $4.2 billion at March 31, 2026 compared to December 31, 2025, reflecting an increase of $63.2 million in interest-bearing demand deposits and $17.5 million in noninterest-bearing demand deposits, partially offset by a decrease of $39.6 million in money market accounts and $17.5 million in CDs. Other liabilities increased $16.5 million, primarily due to an increase in taxes payable associated with the Transaction.

At March 31, 2026, approximately 82.8% of total deposits were insured under FDIC insurance coverage limits, while approximately 17.2% of total deposits were uninsured. At December 31, 2025, approximately

------

81.3% of total deposits were insured under Federal Deposit Insurance Corporation ("FDIC") insurance coverage limits, while approximately 18.7% of total deposits were uninsured.

***Capitalization and Liquidity***

The Company maintained a strong capital and liquidity position at March 31, 2026. Capital levels increased significantly and continued to exceed all applicable regulatory requirements, supported by earnings for the quarter and the impact of the Transaction. The Company remained well capitalized at March 31, 2026.

The Company's Tier 1 capital ratio was 13.52% at March 31, 2026, compared to 10.70% at December 31, 2025. The Company's leverage ratio was 11.10% at March 31, 2026, compared to 9.43% at December 31, 2025. The Company's total risk-based capital ratio was 14.78% at March 31, 2026, compared to 11.95% at December 31, 2025.

The Company did not repurchase any shares under the current repurchase plan during the three months ended March 31, 2026.

The Transaction also resulted in an increase in book value per share and tangible book value of $3.49 per share, reflecting the net gain recognized on the Transaction and the associated improvement in capital.

At March 31, 2026, funding sources accessible to the Company included borrowing availability at the FHLB equal to 30.0% of total assets, or $1.4 billion, subject to eligible collateral pledged, of which the Company had the capacity to borrow an additional $816.6 million. The Company also maintains unsecured facilities with three correspondent financial institutions totaling $30.0 million, a fully secured facility with one correspondent financial institution totaling $25.0 million, and access to the institutional CD market. The borrowing capacity under the secured line of credit decreased by $20.0 million during the quarter ended March 31, 2026, from $45.0 million as of March 13, 2026, as a result of the sale of investment securities previously pledged as collateral to the secured facility, which reduced the borrowing capacity, as the Company did not replace the sold investment securities with new pledged assets.

In addition to these funding sources, the Company had $407.8 million of unpledged available-for-sale investment securities at fair value at March 31, 2026, providing additional liquidity.

**About Carter Bankshares, Inc.**

Headquartered in Martinsville, VA, Carter Bankshares, Inc. (NASDAQ: CARE) provides a full range of commercial banking, consumer banking, mortgage and services through its subsidiary Carter Bank. The Company has $4.8 billion in assets and 63 branches in Virginia and North Carolina as of March 31, 2026. For more information or to open an account visit www.carterbank.com.

**Important Note Regarding Non-GAAP Financial Measures**

In addition to results presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), management uses, and this press release contains or references, certain non-GAAP financial measures, including pre-tax pre-provision income, adjusted net income, adjusted earnings per common share (diluted), tangible book value, adjusted noninterest expense, adjusted efficiency ratio, and interest and dividend income, yield on interest-earning assets, net interest income and net interest margin on a fully taxable equivalent ("FTE") basis. These non-GAAP measures should be read along with the accompanying tables in our definitions and reconciliation of GAAP to non-GAAP financial measures.

Management believes these non-GAAP financial measures are useful because they enhance the ability of investors and management to evaluate and compare the Company's operating results across periods in a

------

meaningful manner. These measures also assist in assessing the Company's underlying operating performance and performance trends and facilitate comparisons with other financial services companies.

The Company believes that presenting interest and dividend income, yield on interest-earning assets, net interest income and net interest margin on an FTE basis improves comparability between income derived from taxable and tax-exempt sources and is consistent with industry practice.

While management believes these non-GAAP measures provide meaningful supplemental information, they should not be considered as an alternative to GAAP results, as more relevant than financial results prepared in accordance with GAAP, or as necessarily comparable to similarly titled non-GAAP measures used by other companies. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for an analysis of the Company's financial condition or results of operations as reported under GAAP. Investors are encouraged to review the Company's GAAP financial results and all other relevant information when evaluating its performance and financial condition.

**Important Note Regarding Forward-Looking Statements**

*This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements made in Mr. Van Dyke's quotations and may include statements relating to our financial condition, market conditions, results of operations, plans, including our strategic plan, brand strategy, and guiding principles and the anticipated results of the foregoing, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, loan pipeline and nonaccrual and nonperforming loans. Forward looking statements are typically identified by words or phrases such as "will likely result," "expect," "anticipate," "estimate," "forecast," "project," "intend," "believe," "assume," "strategy," "trend," "plan," "outlook," "outcome," "continue," "remain," "potential," "opportunity," "comfortable," "current," "position," "maintain," "sustain," "seek," "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may.*

*These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond the Company's control. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Actual results may differ significantly from those expressed in or implied by these forward-looking statements. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements including, but not limited to the effects of:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• market interest rates and the impacts of market interest rates on economic conditions, customer behavior, and the Company's net interest margin, net interest income, funding costs and its deposit, loan and securities portfolios;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• inflation, market and monetary fluctuations;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• changes in trade policies, tariffs, monetary and fiscal policies and laws of the U.S. government and the related impacts on economic conditions and financial markets, and changes in policies of the Federal Reserve, FDIC and U.S. Department of the Treasury;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• changes in accounting policies, practices, or guidance, for example, our adoption of Current Expected Credit Losses ("CECL") methodology, including potential volatility in the Company's operating results due to application of the CECL methodology;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• cyber-security threats, attacks or events;*

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• rapid technological developments and changes, including emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action or increase cybersecurity threats;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our ability to resolve our nonperforming assets and our ability to secure collateral on loans that have entered nonaccrual status due to loan maturities and failure to pay in full;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• changes in the Company's liquidity and capital positions;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• concentrations of loans secured by real estate, particularly commercial real estate ("CRE") loans, and the potential impacts of changes in market conditions on the value of real estate collateral;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• increased delinquency and foreclosure rates on CRE loans;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• an insufficient allowance for credit losses;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, war and other geopolitical conflicts or public health events (such as pandemics), and of any governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on macroeconomic conditions, the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• a change in spreads on interest-earning assets and interest-bearing liabilities;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• regulatory supervision and oversight, including our relationship with regulators and any actions that may be initiated by our regulators;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• legislation affecting the financial services industry as a whole, and the Company and the Bank, in particular and changes impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• the outcome of pending and future litigation and/or governmental proceedings;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• increasing price and product/service competition;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• the ability to continue to introduce competitive new products and services on a timely, cost-effective basis;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• managing our internal growth and acquisitions;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating acquired operations will be more difficult, disruptive or more costly than anticipated;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• the soundness of other financial institutions and any indirect exposure related to large bank failures and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with those failed banks may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships with;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• material increases in costs and expenses;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• reliance on significant customer relationships;*

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• general economic or business conditions, including unemployment levels, supply chain disruptions, slowdowns in economic growth, government shutdowns and geopolitical instability and tensions;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• significant weakening of the local economies in which we operate;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• changes in customer behaviors, including consumer spending, borrowing and saving habits;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• changes in deposit flows and loan demand;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• our failure to attract or retain key associates;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• expansions or consolidations in the Company's branch network, including that the anticipated benefits of the Company's branch acquisitions or the Company's branch network optimization project are not fully realized in a timely manner or at all;*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• deterioration of the housing market and reduced demand for mortgages; and*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses.*

*Many of these factors, as well as other factors, are described in our filings with the Securities and Exchange Commission, including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. All risk factors and uncertainties described herein and therein should be considered in evaluating the Company's forward-looking statements. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events are expressed in or implied by a forward-looking statement may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update, revise or clarify any forward-looking statement to reflect developments occurring after the statement is made, except as required by law.*

*Carter Bankshares, Inc.<br>investorrelations@carterbank.com*

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

**BALANCE SHEETS**

---

| | | | |
|:---|:---|:---|:---|
| **(Dollars in Thousands, except share data)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **(Dollars in Thousands, except share data)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **(Dollars in Thousands, except share data)** | **(unaudited)** | **(audited)** | **(unaudited)** |
| **ASSETS** | | | |
| Cash and Due From Banks, including Interest-Bearing Deposits of $191,357 at March 31, 2026, $68,227 at December 31, 2025 and $46,490 at March 31, 2025 | $228318 | $105163 | $88999 |
| Securities Available-for-Sale, at Fair Value (amortized cost of $716,862 at March 31, 2026, $745,366 at December 31, 2025 and $817,348 at March 31, 2025) | 662127 | 691612 | 745390 |
| Equity Securities | 10246 | 10291 | 10178 |
| Loans Held-for-Sale | 341 | 339 |  |
| Portfolio Loans | 3728461 | 3879560 | 3687495 |
| Allowance for Credit Losses | (52503) | (71491) | (73518) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Portfolio Loans, net** | **3675958** | **3808069** | **3613977** |
| Bank Premises and Equipment, net | 70968 | 72497 | 73944 |
| Goodwill | 1193 | 1193 |  |
| Core Deposit Intangible | 874 | 940 |  |
| Other Real Estate Owned, net | 3443 | 142 | 577 |
| Other Restricted Stock, at Cost | 8476 | 16830 | 5875 |
| Bank Owned Life Insurance | 45247 | 44811 | 48224 |
| Other Assets | 92079 | 100035 | 113123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $**4799270** | $**4851922** | $**4700287** |
| **LIABILITIES** |  |  |  |
| Deposits: |  |  |  |
| &nbsp;&nbsp;&nbsp;Noninterest-Bearing Demand | $637933 | $620473 | $631714 |
| &nbsp;&nbsp;&nbsp;Interest-Bearing Demand | 871398 | 808171 | 794059 |
| &nbsp;&nbsp;&nbsp;Money Market | 514362 | 553964 | 528381 |
| &nbsp;&nbsp;&nbsp;Savings | 326929 | 326182 | 353394 |
| &nbsp;&nbsp;&nbsp;Certificates of Deposit | 1884628 | 1902099 | 1893379 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Deposits** | **4235250** | **4210889** | **4200927** |
| Federal Home Loan Bank Borrowings |  | 178500 | 55000 |
| Reserve for Unfunded Loan Commitments | 2774 | 2992 | 3072 |
| Other Liabilities | 56344 | 39844 | 39522 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **4294368** | **4432225** | **4298521** |
| **SHAREHOLDERS' EQUITY** |  |  |  |
| Common Stock, Par Value $1.00 Per Share, Authorized 100,000,000 Shares; |  |  |  |
| Outstanding- 22,159,980 shares at March 31, 2026, 22,083,007 shares at December 31, 2025 and 23,161,993 shares at March 31, 2025 | 22160 | 22083 | 23162 |
| Additional Paid-in Capital | 74987 | 74806 | 92418 |
| Retained Earnings | 450725 | 364968 | 342559 |
| Accumulated Other Comprehensive Loss | (42970) | (42160) | (56373) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Shareholders' Equity** | **504902** | **419697** | **401766** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Shareholders' Equity** | $**4799270** | $**4851922** | $**4700287** |
| **PERFORMANCE RATIOS** |  |  |  |
| Return on Average Assets (QTD Annualized) | 7.13% | 0.70% | 0.78% |
| Return on Average Assets (YTD Annualized) | 7.13% | 0.66% | 0.78% |
| Return on Average Shareholders' Equity (QTD Annualized) | 80.05% | 8.12% | 9.27% |
| Return on Average Shareholders' Equity (YTD Annualized) | 80.05% | 7.74% | 9.27% |
| Portfolio Loans to Deposit Ratio | 88.03% | 92.13% | 87.78% |
| Allowance for Credit Losses to Total Portfolio Loans | 1.41% | 1.84% | 1.99% |
| **CAPITALIZATION RATIOS** |  |  |  |
| Shareholders' Equity to Assets | 10.52% | 8.65% | 8.55% |
| Tier 1 Leverage Ratio | 11.10% | 9.43% | 9.67% |
| Risk-Based Capital - Tier 1 | 13.52% | 10.70% | 11.01% |
| Risk-Based Capital - Total | 14.78% | 11.95% | 12.27% |

---

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

 **total INCOME STATEMENTS**

---

| | | | |
|:---|:---|:---|:---|
| | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands, except per share data)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **(Dollars in Thousands, except per share data)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **(Dollars in Thousands, except per share data)** | **(unaudited)** | **(audited)** | **(unaudited)** |
| Interest Income | $59185 | $59298 | $56007 |
| Interest Expense | 23251 | 24694 | 25869 |
| &nbsp;&nbsp;**NET INTEREST INCOME** | **35934** | **34604** | **30138** |
| Recovery for Credit Losses | (33917) | (2178) | (2025) |
| Recovery for Unfunded Commitments | (218) | (80) | (114) |
| &nbsp;&nbsp;**NET INTEREST INCOME AFTER RECOVERY FOR CREDIT LOSSES** | **70069** | **36862** | **32277** |
| **NONINTEREST INCOME** |  |  |  |
| Gain on the Transaction | 65000 |  |  |
| Gains on Sales of Securities, net | 80 | 46 |  |
| Service Charges, Commissions and Fees | 2128 | 1813 | 1874 |
| Debit Card Interchange Fees | 2148 | 1947 | 2104 |
| Insurance Commissions | 954 | 666 | 344 |
| Bank Owned Life Insurance Income | 436 | 456 | 341 |
| Other | 228 | 297 | 2238 |
| &nbsp;&nbsp;**Total Noninterest Income** | **70974** | **5225** | **6901** |
| **NONINTEREST EXPENSE** |  |  |  |
| Salaries and Employee Benefits | 14915 | 15981 | 13657 |
| Occupancy Expense, net | 4861 | 4336 | 4472 |
| FDIC Insurance Expense | 1510 | 1527 | 1430 |
| Other Taxes | 925 | 876 | 947 |
| Advertising Expense | 926 | 883 | 911 |
| Telephone Expense | 292 | 293 | 304 |
| Professional and Legal Fees | 1546 | 1874 | 1230 |
| Data Processing | 1853 | 1492 | 1444 |
| Debit Card Expense | 1001 | 1250 | 992 |
| Other | 3183 | 2492 | 2655 |
| &nbsp;&nbsp;**Total Noninterest Expense** | **31012** | **31004** | **28042** |
| **Income Before Income Taxes** | **110031** | **11083** | **11136** |
| Income Tax Provision | 24274 | 2603 | 2183 |
| **Net Income** | $**85757** | $**8480** | $**8953** |
| Shares Outstanding, at End of Period | 22159980 | 22083007 | 23161993 |
| Average Shares Outstanding - Basic & Diluted | 21846942 | 21857904 | 22873800 |
| **PER SHARE DATA** |  |  |  |
| Basic Earnings Per Common Share\* | $3.88 | $0.38 | $0.39 |
| Diluted Earnings Per Common Share\* | $3.88 | $0.38 | $0.39 |
| Book Value | $22.78 | $19.01 | $17.35 |
| Tangible Book Value<sup>3</sup> | $22.69 | $18.91 | $17.35 |
| Market Value | $23.32 | $19.66 | $16.18 |
| **PROFITABILITY RATIOS (GAAP)** |  |  |  |
| Net Interest Margin  | 3.07% | 2.92% | 2.68% |
| Efficiency Ratio | 29.01% | 77.84% | 75.71% |
| **PROFITABILITY RATIOS (Non-GAAP)** |  |  |  |
| Net Interest Margin (FTE)<sup>4</sup> | 3.08% | 2.93% | 2.70% |
| Adjusted Efficiency Ratio (Non-GAAP)<sup>5</sup> | 72.66% | 76.85% | 78.67% |

---

\*All outstanding unvested restricted stock awards are considered participating securities for the earnings per share calculation. As such, these shares have been allocated to a portion of net income ($1,069 thousand, $104 thousand and $93 thousand for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively) and are excluded from the diluted earnings per share calculation.

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

**NET INTEREST MARGIN (FTE) (QTD AVERAGES)**

**(Unaudited)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
| **(Dollars in Thousands)** | **Average <br>Balance** | **Income/<br>Expense** | **Rate** | **Average <br>Balance** | **Income/<br>Expense** | **Rate** | **Average <br>Balance** | **Income/<br>Expense** | **Rate** |
| **ASSETS** | | | | | | | | | |
| Interest-Bearing Deposits with Banks | $75984 | $693 | 3.70% | $67998 | $697 | 4.07% | $67387 | $748 | 4.50% |
| Tax-Free Investment Securities<sup>4</sup> | 11503 | 83 | 2.93% | 11543 | 83 | 2.85% | 11662 | 84 | 2.92% |
| Taxable Investment Securities | 733785 | 5582 | 3.09% | 767913 | 6165 | 3.19% | 807891 | 6655 | 3.34% |
| &nbsp;&nbsp;**Total Securities** | **745288** | **5665** | **3.08%** | **779456** | **6248** | **3.18%** | **819553** | **6739** | **3.33%** |
| Commercial Real Estate | 2132911 | 31687 | 6.03% | 2088480 | 31822 | 6.05% | 1891376 | 29180 | 6.26% |
| Commercial & Industrial | 224422 | 3946 | 7.13% | 208819 | 3122 | 5.93% | 212851 | 3220 | 6.14% |
| Residential Mortgages | 829413 | 8728 | 4.27% | 828866 | 9076 | 4.34% | 811508 | 8499 | 4.25% |
| Other Consumer | 26526 | 279 | 4.27% | 28468 | 349 | 4.86% | 28329 | 419 | 6.00% |
| Construction | 466197 | 8096 | 7.04% | 450531 | 7923 | 6.98% | 432761 | 7268 | 6.81% |
| Other | 231620 |  | —% | 240527 |  | —% | 283839 |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Loans**<sup>a</sup> | **3911089** | **52736** | **5.47%** | **3845691** | **52292** | **5.39%** | **3660664** | **48586** | **5.38%** |
| Other Restricted Stock, at Cost | 15969 | 245 | 6.22% | 13772 | 220 | 6.34% | 6499 | 112 | 6.99% |
| &nbsp;&nbsp;**Total Interest-Earning Assets** | **4748330** | **59339** | **5.07%** | **4706917** | **59457** | **5.01%** | **4554103** | **56185** | **5.00%** |
| Noninterest Earning Assets | 129942 |  |  | 125545 |  |  | 121766 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $**4878272** |  |  | $**4832462** |  |  | $**4675869** |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |  |  |  |
| Interest-Bearing Demand | $818471 | $2709 | 1.34% | $817489 | $3046 | 1.48% | $744895 | $3386 | 1.84% |
| Money Market | 567093 | 2975 | 2.13% | 547874 | 3198 | 2.32% | 525463 | 3319 | 2.56% |
| Savings | 327138 | 111 | 0.14% | 329663 | 107 | 0.13% | 355123 | 113 | 0.13% |
| Certificates of Deposit | 1897557 | 15760 | 3.37% | 1907556 | 16726 | 3.48% | 1918195 | 18205 | 3.85% |
| &nbsp;&nbsp;**Total Interest-Bearing Deposits** | **3610259** | **21555** | **2.42%** | **3602582** | **23077** | **2.54%** | **3543676** | **25023** | **2.86%** |
| Federal Home Loan Bank Borrowings | 160033 | 1556 | 3.94% | 144402 | 1476 | 4.06% | 69833 | 702 | 4.08% |
| Federal Funds Purchased |  |  | —% | 1 |  | —% |  |  | —% |
| Other Borrowings | 10870 | 140 | 5.22% | 11033 | 141 | 5.07% | 10417 | 144 | 5.61% |
| &nbsp;&nbsp;**Total Borrowings** | **170903** | **1696** | **4.02%** | **155436** | **1617** | **4.13%** | **80250** | **846** | **4.28%** |
| &nbsp;&nbsp;**Total Interest-Bearing Liabilities** | **3781162** | **23251** | **2.49%** | **3758018** | **24694** | **2.61%** | **3623926** | **25869** | **2.90%** |
| Noninterest-Bearing Liabilities | 662638 |  |  | 660217 |  |  | 660437 |  |  |
| Shareholders' Equity | 434472 |  |  | 414227 |  |  | 391506 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Shareholders' Equity** | $**4878272** |  |  | $**4832462** |  |  | $**4675869** |  |  |
| **Net Interest Income**<sup>4</sup> |  | $**36088** |  |  | $**34763** |  |  | $**30316** |  |
| **Net Interest Margin**<sup>4</sup> |  |  | **3.08%** |  |  | **2.93%** |  |  | **2.70%** |

---

<sup>a</sup> Nonaccruing loans are included in the daily average loan amounts outstanding.

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

**LOANS AND LOANS HELD-FOR-SALE**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **Commercial** | | | |
| &nbsp;&nbsp;&nbsp;Commercial Real Estate | $2127928 | $2114314 | $1915863 |
| &nbsp;&nbsp;&nbsp;Commercial and Industrial | 245455 | 231921 | 234024 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Commercial Loans** | **2373383** | **2346235** | **2149887** |
| **Consumer** |  |  |  |
| &nbsp;&nbsp;&nbsp;Residential Mortgages | 815263 | 822141 | 801253 |
| &nbsp;&nbsp;&nbsp;Other Consumer | 26264 | 28416 | 28804 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Consumer Loans** | **841527** | **850557** | **830057** |
| &nbsp;&nbsp;&nbsp;Construction | 513551 | 465613 | 459285 |
| &nbsp;&nbsp;&nbsp;Other |  | 217155 | 248266 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Portfolio Loans** | **3728461** | **3879560** | **3687495** |
| Loans Held-for-Sale | 341 | 339 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Loans** | $**3728802** | $**3879899** | $**3687495** |

---

**ASSET QUALITY DATA**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| | **For the Periods Ended** | **For the Periods Ended** | **For the Periods Ended** |
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **Nonaccrual Loans** | | | |
| Commercial Real Estate | $21649 | $23861 | $9733 |
| Commercial and Industrial | 91 | 1013 | 1070 |
| Residential Mortgages | 1766 | 4623 | 5326 |
| Other Consumer | 28 | 25 | 38 |
| Construction | 437 | 440 | 213 |
| Other |  | 214020 | 245064 |
| &nbsp;&nbsp;**Total Nonperforming Loans** | **23971** | **243982** | **261444** |
| Other Real Estate Owned | 3443 | 142 | 577 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Nonperforming Assets** | $**27414** | $**244124** | $**262021** |

---

---

| | | | |
|:---|:---|:---|:---|
| Nonperforming Loans to Total Portfolio Loans | 0.64% | 6.29% | 7.09% |
| Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned | 0.73% | 6.29% | 7.10% |
| Allowance for Credit Losses to Total Portfolio Loans | 1.41% | 1.84% | 1.99% |
| Allowance for Credit Losses to Nonperforming Loans | 219.03% | 29.30% | 28.12% |
| Net Loan (Recoveries) / Charge-offs QTD | $(14929) | $93 | $57 |
| Net Loan (Recoveries) / Charge-offs YTD | $(14929) | $472 | $57 |
| Net Loan (Recoveries) / Charge-offs (Annualized) to Average Portfolio Loans QTD | (1.55)% | 0.01% | 0.01% |
| Net Loan (Recoveries) / Charge-offs (Annualized) to Average Portfolio Loans YTD | (1.55)% | 0.01% | 0.01% |

---

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

**ALLOWANCE FOR CREDIT LOSSES**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| Balance Beginning of Period | $71491 | $73762 | $75600 |
| Recovery for Credit Losses | (33917) | (2178) | (2025) |
| Charge-offs: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Real Estate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial and Industrial |  |  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential Mortgages |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Consumer | 138 | 164 | 171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction |  |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Charge-offs** | **138** | **164** | **179** |
| Recoveries: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Real Estate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial and Industrial |  |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential Mortgages | 2 | 2 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Consumer | 65 | 69 | 110 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction |  |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 15000 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Recoveries** | **15067** | **71** | **122** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Net (Recoveries) / Charge-offs** | **(14929)** | **93** | **57** |
| **Balance End of Period** | $**52503** | $**71491** | $**73518** |

---

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

**DEFINITIONS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES:**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| <sup>1</sup> **Pre-tax Pre-provision Income (Non-GAAP)** | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| Net Interest Income | $35934 | $34604 | $30138 |
| Noninterest Income | 70974 | 5225 | 6901 |
| Noninterest Expense | 31012 | 31004 | 28042 |
| &nbsp;&nbsp;**Pre-tax Pre-provision Income (Non-GAAP)** | $**75896** | $**8825** | $**8997** |

---

---

| | | | |
|:---|:---|:---|:---|
| <sup>2</sup> **Adjusted Net Income (Non-GAAP)** | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands, except per share data)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| Net Income | $85757 | $8480 | $8953 |
| Gain on the Transaction | (65000) |  |  |
| Specific Reserves Released Related to the Transaction | (18035) |  |  |
| Net Recoveries Related to the Transaction | (15000) |  |  |
| Gains on Sales of Securities, net | (80) | (46) |  |
| Equity Security Unrealized Fair Value Loss (Gain) | 45 | (22) | (137) |
| Losses (Gains) on Sales and Write-downs of Bank Premises, net | 1 | 188 | (3) |
| Losses (Gains) on Sales and Write-downs of OREO, net | 569 | (51) | 81 |
| 1035 Exchange fee on BOLI |  | 133 | 275 |
| Gain on BOLI death benefit<sup>6</sup> |  |  | (1882) |
| FHLB Early Prepayment Credit | (130) |  |  |
| Severance Pay |  | 55 |  |
| Total Tax Effect | 20502 | (54) | (45) |
| Modified Endowment Contract (MEC) 10% penalty on BOLI Surrender |  | 121 |  |
| Tax Effect on BOLI Surrender |  | 254 |  |
| &nbsp;&nbsp;**Adjusted Net Income (Non-GAAP)** | $**8629** | $**9058** | $**7242** |
| Average Shares Outstanding - diluted | 21846942 | 21857904 | 22873800 |
| &nbsp;&nbsp;**Adjusted Earnings Per Common Share (diluted) (Non-GAAP)** | $**0.40** | $**0.41** | $**0.32** |

---

---

| | | | |
|:---|:---|:---|:---|
| <sup>3</sup> **Tangible Book Value (Non-GAAP)** | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands, except per share data)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| Total Shareholders Equity | $504902 | $419697 | $401766 |
| &nbsp;&nbsp;&nbsp;Less: goodwill and other intangible assets, net of deferred tax liability | (2052) | (2122) |  |
| &nbsp;&nbsp;**Tangible Shareholders' Equity (Non-GAAP)** | **502850** | **417575** | **401766** |
| Shares Outstanding | 22159980 | 22083007 | 23161993 |
| &nbsp;&nbsp;**Tangible Book Value (Non-GAAP)** | $**22.69** | $**18.91** | $**17.35** |

---

------

**CARTER BANKSHARES, INC.**

**CONSOLIDATED SELECTED FINANCIAL DATA**

<sup>4</sup> **Net interest income has been computed on a fully taxable equivalent basis ("FTE") using 21% federal income tax rate for the 2026 and 2025 periods.**

---

| | | | |
|:---|:---|:---|:---|
| **Net Interest Income (FTE) (Non-GAAP)** | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| Interest and Dividend Income (GAAP) | $59185 | $59298 | $56007 |
| Tax Equivalent Adjustment<sup>4</sup> | 154 | 159 | 178 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Interest and Dividend Income (FTE) (Non-GAAP)** | **59339** | **59457** | **56185** |
| Average Earning Assets | $4748330 | $4706917 | $4554103 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Yield on Interest-earning Assets (GAAP)** | **5.05%** | **5.00%** | **4.99%** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Yield on Interest-earning Assets (FTE) (Non-GAAP)** | **5.07%** | **5.01%** | **5.00%** |
| Net Interest Income (GAAP) | $35934 | $34604 | $30138 |
| Tax Equivalent Adjustment<sup>4</sup> | 154 | 159 | 178 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net Interest Income (FTE) (Non-GAAP)** | **36088** | **34763** | **30316** |
| Average Earning Assets | $4748330 | $4706917 | $4554103 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net Interest Margin (GAAP)** | **3.07%** | **2.92%** | **2.68%** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net Interest Margin (FTE) (Non-GAAP)** | **3.08%** | **2.93%** | **2.70%** |

---

---

| | | | |
|:---|:---|:---|:---|
| <sup>5</sup>**Adjusted Efficiency Ratio (Non-GAAP)** | **Quarter-to-Date** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **March 31,<br>2025** |
| **Noninterest Expense** | $**31012** | $**31004** | $**28042** |
| Less: (Losses) Gains on sales and write-downs of Branch Premises, net | (1) | (188) | 3 |
| Less: (Losses) Gains on Sales and write-downs of OREO, net | (569) | 51 | (81) |
| Less: 1035 Exchange fee on BOLI |  | (133) | (275) |
| Less: Severance Pay |  | (55) |  |
| &nbsp;&nbsp;**Adjusted Noninterest Expense (Non-GAAP)** | $**30442** | $**30679** | $**27689** |
| **Net Interest Income** | $**35934** | $**34604** | $**30138** |
| Plus: Taxable Equivalent Adjustment<sup>4</sup> | 154 | 159 | 178 |
| &nbsp;&nbsp;**Net Interest Income (FTE) (Non-GAAP)** | $**36088** | $**34763** | $**30316** |
| Less: Gains on Sales of Securities, net | (80) | (46) |  |
| Less: Equity Security Unrealized Fair Value Loss (Gain) | 45 | (22) | (137) |
| Less: Gain on BOLI death benefit<sup>6</sup> |  |  | (1882) |
| Less: Gain on the Transaction | (65000) |  |  |
| Less: FHLB Early Prepayment Credit | (130) |  |  |
| Plus: Noninterest Income | 70974 | 5225 | 6901 |
| &nbsp;&nbsp;**Net Interest Income (FTE) (Non-GAAP) plus Adjusted Noninterest Income** | $**41897** | $**39920** | $**35198** |
| **Efficiency Ratio (GAAP)** | **29.01%** | **77.84%** | **75.71%** |
| **Adjusted Efficiency Ratio (Non-GAAP)** | **72.66%** | **76.85%** | **78.67%** |

---

<sup>6</sup>**The Gain on BOLI death benefit is tax-exempt.**

---

| | | |
|:---|:---|:---|
| <sup>7</sup>**Annualized Loan Growth (Non-GAAP)** | **Quarter-to-Date** | **Quarter-to-Date** |
| **(Dollars in Thousands)** | **March 31,<br>2026** | **December 31,<br>2025** |
| Portfolio Loans | $3728461 | $3879560 |
| Less: Loans Related to the Transaction | (209484) |  |
| **Adjusted Loans (Non-GAAP)** | $**3937945** |  |
| Annualized Portfolio Loan Growth (GAAP) | (15.80)% |  |
| **Annualized Loan Growth (Non-GAAP) in %** | **6.10%** |  |

---

<br>