Carter Bankshares, Inc. (CARE): History, Ownership, Mission, How It Works & Makes Money

Why should you, a savvy investor, be tracking Carter Bankshares, Inc. (CARE) when their Q3 2025 net income was $5.4 million? The real story is how this community bank, founded in 1974, is managing to grow its total portfolio loans to $3.8 billion on an annualized basis while grappling with a significant nonperforming loan concentration that you defintely need to understand. They've expanded their footprint to 64 branches across Virginia and North Carolina, pushing total assets to nearly $4.8 billion by mid-2025, but that growth comes with a complex risk profile. This detailed analysis will show you how Carter Bankshares actually works and makes money, so you can map its community-focused mission against its improving 2.86% net interest margin.

Carter Bankshares, Inc. (CARE) History

You're looking for the foundational story of Carter Bankshares, Inc., and how a single community bank evolved into a regional financial player. The direct takeaway is this: the company started as a classic, founder-driven community bank in 1974 and, through a series of strategic mergers and a 2020 holding company reorganization, transformed into a publicly traded entity focused on disciplined growth and balance sheet strength across Virginia and the Carolinas.

Given Company's Founding Timeline

Carter Bankshares traces its roots to a single branch in a small Virginia town, a common but powerful origin story for many successful regional banks. It was built on the vision of one man who understood the value of local, relationship-based banking.

Year established

The original bank, First National Bank of Rocky Mount, was established on December 13, 1974.

Original location

Rocky Mount, Virginia, where the first branch opened with a staff of eight employees.

Founding team members

The company was founded by banking visionary Worth H. Carter, Jr., who was still serving as the bank's chairman and CEO at the time of his passing in 2017.

Initial capital/funding

The First National Bank in Rocky Mount began operations with approximately $1.2 million in assets in 1974. Here's the quick math: that seed money, plus decades of organic growth and mergers, is what led to the multi-billion dollar institution we see today.

Given Company's Evolution Milestones

The company's history isn't a straight line; it's a series of calculated steps to consolidate power and gain financial flexibility, culminating in the formal holding company structure.

Given Company's Transformative Moments

The biggest shifts for the company involved moving from a collection of local banks to a unified, publicly-traded franchise. These decisions fundamentally changed the bank's operating model and its ability to raise capital.

The transition to a holding company structure in 2020 was defintely a pivotal moment, allowing the bank to better navigate capital requirements and market conditions. This move gave them the financial agility to pursue expansion and manage risk more effectively.

• The 2006 Consolidation: Bringing 10 separate community banks under the Carter Bank & Trust name created a regional footprint across Virginia and North Carolina, replacing a fragmented structure with a single, recognizable brand.
• The 2020 Holding Company Formation: Establishing Carter Bankshares, Inc. as the parent company (NASDAQ: CARE) separated the bank's operations from its capital structure, a standard move for larger institutions seeking financial flexibility, especially during the uncertainty of the post-COVID-19 environment.
• 2025 Strategic Focus: The company is actively managing a large nonperforming credit relationship, a critical near-term action that impacts their financial and credit metrics. Resolving this issue is key to unlocking the full potential of their recent growth. Plus, they are strategically expanding in North and South Carolina with new executive hires, signaling a clear intent for geographic growth beyond their core Virginia markets.

If you want to dive deeper into the current financial performance and risk factors, you should read Breaking Down Carter Bankshares, Inc. (CARE) Financial Health: Key Insights for Investors. It's important to see how this history impacts their current balance sheet.

Carter Bankshares, Inc. (CARE) Ownership Structure

Carter Bankshares, Inc. (CARE) operates with a majority of its stock held by institutional investors, which is typical for a publicly traded regional bank holding company. This structure means that large asset managers and funds significantly influence the company's strategic direction, though retail investors still hold a substantial stake.

Given Company's Current Status

Carter Bankshares, Inc., the holding company for Carter Bank, is a publicly traded entity, not a private one. Its common stock is listed and actively traded on the NASDAQ Global Select Market under the ticker symbol CARE. As of November 2025, the company's market capitalization stands at approximately $380.34 million, reflecting its status as a regional bank with a strong community focus. The company's wholly-owned subsidiary, Carter Bank, received approval on November 13, 2025, to become a state member bank, placing it under the regulatory oversight of the Federal Reserve Bank of Richmond. For the first nine months of the 2025 fiscal year, the company reported a net income of $22.9 million, or $1.00 diluted earnings per share.

Given Company's Ownership Breakdown

The ownership structure of Carter Bankshares is heavily weighted toward professional financial institutions, which is a key factor in its governance and decision-making. As of November 2025, institutional investors control over half of the company's shares, while insider ownership remains relatively small.

The significant institutional ownership means that any major strategic shift or acquisition will defintely require the support of these large, professional shareholders. This is where the Mission Statement, Vision, & Core Values of Carter Bankshares, Inc. (CARE) become critical, as they must align with the expectations of these sophisticated investors.

Given Company's Leadership

The company is steered by a seasoned executive team and a board of directors with deep banking and risk management experience, ensuring stability and a focus on community banking principles.

• Litz H. Van Dyke: Chief Executive Officer (CEO) and Director. He has been instrumental in the company's turnaround and strategic growth.
• James W. Haskins: Chairman of the Board. He brings decades of experience, having served as a Director since 1982.
• Bradford N. Langs, CFA: President and Chief Strategy Officer for Carter Bank. He focuses on driving the bank's long-term strategic and financial initiatives.
• Wendy S. Bell: Senior Executive Vice President and Chief Financial Officer (CFO). She oversees the company's financial health, including its total assets of $4.8 billion as of June 30, 2025.
• Tony E. Kallsen: Senior Executive Vice President and Chief Credit Officer for Carter Bank. His role is crucial in managing the loan portfolio, which totaled $3.7 billion as of March 31, 2025.

The management team's average tenure is around five years, which shows a good mix of experience and stability in steering the bank through market cycles. They are currently focused on improving the efficiency ratio, which stood at 73.43% in the third quarter of 2025.

Carter Bankshares, Inc. (CARE) Mission and Values

Carter Bankshares, Inc.'s commitment goes beyond just moving money; its core purpose is to create opportunities for people and businesses to prosper, which is a defintely human-centered approach for a community bank. This focus on local success is backed by a clear set of values-Relationships, Trust, and Ownership-that guide their strategic decisions, including their move to streamline regulatory structure by becoming a state member bank of the Federal Reserve Bank of Richmond in late 2025.

Carter Bankshares, Inc.'s Core Purpose

You're not just looking for a balance sheet; you want to know what the company stands for, and for Carter Bankshares, Inc., it's about tangible community impact. They operate as a financial holding company for Carter Bank, primarily serving Virginia and North Carolina.

Official Mission Statement

The company's mission is articulated as a purpose statement, setting a clear, actionable goal for every associate. This isn't corporate jargon; it's a direct promise to their operating communities.

• To create opportunities for more people and businesses to prosper.

This mission drives their lending focus; for example, they funded $450 million in construction loans over a 12-18 month period, as highlighted in their Q3 2025 financial highlights, directly fueling local development.

Vision Statement

The vision for Carter Bankshares, Inc. is to solidify its position as a leading community bank. This means not just growing, but growing in a way that deepens local ties and improves service quality.

• Be a leading community bank in its geographic footprint.
• Provide exceptional customer service and build long-term relationships.
• Pursue prudent growth, primarily organic, while considering opportunistic acquisitions.

Their strategic priorities for 2025 reflect this vision: a focus on core deposit acquisition and diversified loan growth, plus a branch acquisition that was expected to add close to $60 million in funding to their deposit base. That's how you execute a community-focused vision.

Core Values

In June 2023, Carter Bankshares, Inc. introduced a new set of guiding principles to strengthen their internal culture and align with future growth. These values are the bedrock of their operational ethos.

• Build Relationships: Focus on personalized service and local decision-making.
• Earn Trust: Maintain financial strength and stability, evidenced by a Tier 1 Capital ratio of 11.01% at March 31, 2025.
• Take Ownership: Empower associates to support the company's growth and success.

This cultural shift is key to their long-term viability, especially as total assets reached $4.8 billion in Q3 2025, requiring a strong internal culture to manage that scale effectively. You can learn more about this foundational shift here: Mission Statement, Vision, & Core Values of Carter Bankshares, Inc. (CARE).

Carter Bankshares, Inc. Slogan/Tagline

The company recently refreshed its brand identity, simplifying its name and adopting a new tagline that encapsulates its customer-centric promise.

• Life Lived Full.

This tagline denotes the bank's importance on helping its customers fulfill their hopes and dreams, whether that's a small business loan or a home equity line of credit. It's a simple, powerful statement of purpose.

Carter Bankshares, Inc. (CARE) How It Works

Carter Bankshares, Inc. operates as a community bank holding company, generating revenue primarily by taking in deposits-your money-and lending it out to individuals and businesses at a higher interest rate, a process known as net interest income. As of Q3 2025, the company manages $\mathbf{4.8\text{ billion}}$ in total assets and focuses on relationship-driven banking across Virginia and North Carolina.

Carter Bankshares' Product/Service Portfolio

The bank's portfolio is built on core community banking services, targeting both retail customers and commercial entities within its regional footprint. This balanced approach helps diversify risk, plus it ensures a steady deposit base, which is crucial for funding loan growth.

Carter Bankshares' Operational Framework

The bank's operational framework is centered on a traditional 'borrow short, lend long' model, but with a recent, sharp focus on efficiency and regulatory streamlining. They make money on the spread between the interest they pay on deposits and the interest they earn on loans and securities. For the nine months ended September 30, 2025, the company reported net income of $\mathbf{\$22.9\text{ million}}$.

Here's the quick math on how they drive value:

• Funding Loans with Core Deposits: Total deposits grew $\mathbf{3.1\%}$ year-over-year as of Q3 2025, which provides a lower-cost, more stable funding source than wholesale borrowing.
• Loan Portfolio Expansion: Total portfolio loans reached $\mathbf{\$3.8\text{ billion}}$ in Q3 2025, representing $\mathbf{9.4\%}$ annualized growth, which directly boosts net interest income.
• Regulatory Streamlining: Carter Bank became a state member bank of the Federal Reserve Bank of Richmond in November 2025, which is defintely expected to streamline regulatory oversight and enhance operational efficiency.
• Efficiency Improvement: The efficiency ratio-which measures non-interest expense as a percentage of revenue-improved to $\mathbf{73.43\%}$ in Q3 2025, indicating better cost management.

You need to keep an eye on credit quality, though, as nonperforming loans (NPLs) still impact interest income, a lingering risk from a large credit relationship.

Carter Bankshares' Strategic Advantages

Carter Bankshares maintains its competitive edge by leveraging its community bank status and recent strategic moves to optimize its balance sheet and regulatory structure. This dual focus on local relationships and corporate efficiency is key.

• Deep Regional Footprint: Operating $\mathbf{64}$ branches across Virginia and North Carolina as of May 2025, the bank maintains a strong local presence, fostering the relationship banking model that is hard for large national banks to replicate.
• Sticky Deposit Base: The long-standing 'Lifetime Free Checking' product creates extremely loyal, low-cost customer relationships, providing a stable foundation for lending.
• Improved Net Interest Margin (NIM): NIM reached $\mathbf{2.86\%}$ in Q3 2025, up 6 basis points from the prior quarter, showing the management team is effectively pricing loans and managing funding costs in the current interest rate environment.
• Financial Holding Company Status: Conversion to a financial holding company provides greater flexibility to innovate and grow, including potentially expanding into non-bank financial services in the future.

For a deeper dive into the numbers, you should check out Breaking Down Carter Bankshares, Inc. (CARE) Financial Health: Key Insights for Investors.

Carter Bankshares, Inc. (CARE) How It Makes Money

Carter Bankshares, Inc. primarily makes money the way most community banks do: by borrowing funds from depositors at a low interest rate and lending that money out at a higher rate, a process known as net interest income (NII). The bank also earns a smaller, but growing, portion of its revenue from non-interest activities, such as service charges and insurance commissions.

This core banking model is heavily reliant on the spread-the difference between the interest earned on its loan and investment portfolio and the interest paid on deposits and borrowings. It's a classic, spread-based business.

Carter Bankshares' Revenue Breakdown

As of the third quarter of 2025, the bank's revenue mix clearly shows its reliance on traditional lending activities, with over 86% of its top line coming from net interest income. Here's the quick math for the quarter ending September 30, 2025, based on total revenue of approximately $39.1 million:

Net Interest Income (NII) for Q3 2025 was $33.7 million, showing a strong 17.1% increase year-over-year. Noninterest Income, which was $5.4 million for the quarter, also increased by 9.4% from the prior quarter, driven mainly by higher insurance commissions.

Business Economics

The economic engine of Carter Bankshares is its ability to manage its net interest margin (NIM), which is the profitability of its core lending business. In Q3 2025, the NIM stood at 2.86%. This margin improved by 28 basis points (bps) from the same period last year, which is a defintely positive trend in a challenging rate environment.

The improvement is mostly due to two factors: a decline in funding costs-what they pay on deposits-and a higher yield on interest-earning assets, like loans. They're strategically redeploying cash into higher-yielding securities and managing deposit costs aggressively. The bank's pricing strategy for loans is focused on commercial real estate (CRE) and residential mortgages, which drove a 9.4% annualized growth in total portfolio loans, reaching $3.8 billion as of September 30, 2025.

• Loan production funded year-to-date at an average of 6.77%.
• Total assets reached $4.8 billion as of September 30, 2025.
• A large portion of the bank's deposits, 78.2%, comes from a diversified, granular base of retail customers, which helps keep funding costs stable.

Carter Bankshares' Financial Performance

While the bank is showing solid operational improvements in its core business, its financial performance is still being weighed down by a significant nonperforming loan (NPL) relationship, which is a key risk you need to watch. This single issue has negatively impacted interest income by millions of dollars.

Here are the critical metrics for the third quarter of 2025:

• Net Income: $5.4 million, or $0.24 diluted earnings per share (EPS). This was a decrease from the prior quarter, but consistent with the same quarter in 2024.
• Efficiency Ratio: Improved to 73.4%, down from 78.63% in Q2 2025, which means the bank is spending less to generate a dollar of revenue. That's a great sign for cost control.
• Nonperforming Loans (NPLs): Increased to $258.6 million, representing 6.74% of total portfolio loans. This is the elephant in the room.
• Pre-tax Pre-provision Income: This metric, which strips out the impact of loan loss provisions, was $10.4 million, a strong increase from $8.0 million in the prior quarter. This shows the underlying operating business is performing well.

What this estimate hides is the full resolution of that large NPL relationship, which continues to skew the net income figure lower than the underlying business performance would suggest. The focus for management is on resolving those legacy issues while maintaining the strong loan growth momentum. For a deeper dive into the numbers, check out Breaking Down Carter Bankshares, Inc. (CARE) Financial Health: Key Insights for Investors.

Next step: You should model the impact of a 50% resolution of the NPL balance on the 2026 EPS forecast by the end of the month.

Carter Bankshares, Inc. (CARE) Market Position & Future Outlook

Carter Bankshares is strategically repositioning itself from a legacy community bank to a more agile, growth-oriented regional player, focusing on commercial lending and geographic expansion. The company's future outlook hinges on its ability to resolve the long-standing credit concentration issue while capitalizing on its strong annualized loan growth of 9.4% as of the third quarter of 2025.

You're seeing a classic community bank pivot: maintaining local ties but aggressively pursuing higher-margin commercial business. That's a defintely tough balancing act.

Competitive Landscape

Carter Bankshares operates in a highly fragmented but intensely competitive regional market spanning Virginia and North Carolina, where it contends with both smaller community banks and massive super-regional institutions. To put the scale in perspective, Carter Bankshares' total assets of $4.8 billion as of June 30, 2025, are dwarfed by the major players it competes against, creating constant pressure on pricing and technology investment.

Here's the quick math: the relative market share above illustrates the sheer scale difference when comparing Carter Bankshares to major regional players like Towne Bank ($18.26 billion in assets) and the super-regional First Citizens Bancshares ($230 billion in assets), which is a top 20 U.S. financial institution.

Opportunities & Challenges

The company has clear opportunities to drive earnings growth through its improved net interest margin, which hit 2.86% in Q3 2025, but it must first neutralize the drag from legacy credit issues. The conversion to a financial holding company, announced in November 2025, provides greater flexibility for future non-banking business expansion and strategic acquisitions.

Industry Position

Carter Bankshares is positioned as a mid-sized community bank focused on a regional transformation. Its primary strength lies in its deeply entrenched community presence and a loyal, granular deposit base, with approximately 78.2% of deposits coming from retail customers. This is a low-cost funding advantage. Still, the bank is actively shedding its legacy image and accelerating its commercial lending portfolio, evidenced by the Q3 2025 net interest income of $33.7 million.

• Maintain a strong capital base with a Tier 1 Capital ratio of 10.66% as of September 30, 2025, supporting future growth initiatives.
• Prioritize the resolution of the nonaccrual credit relationship to free up capital and improve the efficiency ratio, which stood at 73.43% in Q3 2025.
• Continue the strategic repurchase program, with $9.1 million of the authorized $20 million already utilized in 2025, signaling management's confidence in the stock's undervaluation.

For a deeper dive into the numbers, check out Breaking Down Carter Bankshares, Inc. (CARE) Financial Health: Key Insights for Investors. Finance: Monitor the NPL resolution timeline closely, as it dictates the pace of margin improvement.