Carter Bankshares, Inc. (NASDAQ:CARE) has announced its third-quarter financial results for 2025, reporting a net income of $5.4 million, or $0.24 diluted earnings per share (EPS). This is a decrease from the second quarter of 2025 when the company reported a net income of $8.5 million, or $0.37 diluted EPS. In the third quarter of 2024, the net income was $5.6 million, or $0.24 diluted EPS.
Net interest income for the third quarter of 2025 was $33.7 million, an increase from $32.4 million in the second quarter of 2025 and $28.8 million in the third quarter of 2024. Pre-tax pre-provision income was $10.4 million for the third quarter of 2025, $8.0 million for the second quarter of 2025, and $6.8 million for the third quarter of 2024.
For the nine months ended September 30, 2025, net income was $22.9 million, or $1.00 diluted EPS, compared to $16.2 million, or $0.70 diluted EPS for the same period in 2024. Net interest income was $96.2 million for the nine months ended September 30, 2025, and $85.3 million for the nine months ended September 30, 2024. Pre-tax pre-provision income was $27.3 million and $20.2 million for the nine months ended September 30, 2025 and 2024, respectively.
The company’s financial results have been significantly impacted by loans in the bank's other segment of the company’s loan portfolio, particularly related to the Justice entities. As of September 30, 2025, the aggregate principal balance of these loans was $228.6 million, impacting interest income negatively.
Financial highlights for the three and nine months ended September 30, 2025, include:
- Total portfolio loans increased $88.5 million, or 9.4%, to $3.8 billion at September 30, 2025, from June 30, 2025, and increased $239.8 million, or 6.7% from September 30, 2024.
- Net interest income totaled $33.7 million, an increase of $1.4 million, or 4.2% compared to the prior quarter, and an increase of $4.9 million, or 17.1% compared to the year-ago quarter.
- Net interest margin increased six basis points to 2.86% for the third quarter of 2025, compared to 2.80% for the prior quarter and increased 28 basis points for the year-ago quarter.
The efficiency ratio was 73.43% for the third quarter of 2025, 78.63% for the second quarter of 2025, and 80.17% for the third quarter of 2024. The adjusted efficiency ratio (non-GAAP) was 73.37%, 75.55%, and 80.65% for the same periods, respectively.
Nonperforming loans (NPLs) increased by $8.1 million to $258.6 million at September 30, 2025, compared to June 30, 2025. NPLs to total portfolio loans were 6.74% at September 30, 2025, 6.69% at June 30, 2025, and 8.00% at September 30, 2024.
Net interest income for the third quarter of 2025 increased $1.4 million, or 4.2%, to $33.7 million compared to the second quarter and increased $4.9 million, or 17.1%, compared to the same period in 2024. The increase in net interest income compared to the second quarter of 2025 was primarily due to a decline in funding costs and a higher yield on average interest-earning assets.
Noninterest income was $5.4 million for the third quarter of 2025, an increase of $0.5 million, or 9.4%, compared to the second quarter of 2025, but decreased $0.1 million compared to the third quarter of 2024.
Noninterest expense was $28.7 million in the third quarter of 2025, representing a decrease of $0.6 million from the prior quarter.
Total assets increased by $56.0 million, to $4.8 billion as of September 30, 2025, compared to June 30, 2025. Cash and due from banks increased to $106.9 million at September 30, 2025, up from $99.9 million at June 30, 2025.
Overall, the company remains committed to resolving its nonperforming credit relationship while maintaining solid fundamentals, financial performance, and asset quality metrics.
As a result of these announcements, the company's shares have moved -0.37% on the market, and are now trading at a price of $18.94. For the full picture, make sure to review Carter Bankshares's 8-K report.
