Carter Bankshares, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Carter Bankshares, Inc. has filed its 2023 annual report (10-K) detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

Carter Bankshares, Inc. (CARE) filed a Annual Report (10-K) with the SEC on March 8, 2024. Carter Bankshares, Inc. filed its 2023 Form 10-K on March 8, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal executive offices are located at 1300 Kings Mountain Road, Martinsville, VA. Carter Bankshares, Inc. operates within the National Commercial Banks industry (SIC 6021). The filing includes financial data for the fiscal years 2020 through 2023.

Why It Matters

For investors and stakeholders tracking Carter Bankshares, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Carter Bankshares' financial health, operational strategies, and risk factors for the past fiscal year, crucial for investors and stakeholders to assess performance and future outlook. As a publicly traded entity, the timely filing of this 10-K is a regulatory requirement that ensures transparency and allows the market to evaluate the company's financial position and compliance with securities laws.

Risk Assessment

Risk Level: low — Carter Bankshares, Inc. shows low risk based on this filing. The filing is a standard annual report (10-K) and does not contain immediate red flags or significant negative developments, indicating a routine disclosure.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand Carter Bankshares' performance and strategic direction for 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-03-08 — Filing Date (Date of submission)
• 6021 — SIC Code (Industry classification)

Key Players & Entities

• Carter Bankshares, Inc. (company) — Filer name
• 1300 Kings Mountain Road (location) — Business address
• Martinsville (location) — Business address city
• VA (location) — Business address state
• 276-656-1776 (phone) — Business phone
• 20231231 (date) — Fiscal year end
• 20240308 (date) — Filing date
• 0001829576-24-000016 (accession_number) — Accession number

FAQ

Industry Context

Carter Bankshares, Inc. operates as a national commercial bank, a sector characterized by interest rate sensitivity, regulatory oversight, and competition.

Regulatory Implications

As a national commercial bank, Carter Bankshares is subject to regulations from federal and state authorities, including the Federal Reserve and state banking departments, concerning capital adequacy, lending practices, and consumer protection.

What Investors Should Do

1. Analyze the financial statements for revenue, net income, and asset growth trends.
2. Examine any disclosed risk factors for potential impacts on future operations.
3. Review management's discussion and analysis for strategic insights and outlook.

Key Dates

• 2024-03-08: 10-K Filing — Filing of the annual report for fiscal year 2023.
• 2023-12-31: Fiscal Year End — End date of the reporting period.

Year-Over-Year Comparison

This filing is the 2023 annual report (10-K), providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $1 — ange on which registered Common Stock, $1 par value CARE Nasdaq Global Select Mar
• $4.5 billion — n Martinsville, Virginia with assets of $4.5 billion at December 31, 2023. The Company is th
• $1.00 — s of the Bank's common stock, par value $1.00 per share, formerly held by its shareho

Filing Documents

• care-20231231.htm (10-K) — 4939KB
• care-20231231xex211.htm (EX-21.1) — 3KB
• consent-2023123110k.htm (EX-23.1) — 2KB
• care-20231231x10kxex311.htm (EX-31.1) — 10KB
• care-20231231x10kxex312.htm (EX-31.2) — 10KB
• care-20231231x10kxex321.htm (EX-32.1) — 4KB
• care-20231231x10kxex322.htm (EX-32.2) — 4KB
• ex-97x2023carexclawbackpol.htm (EX-97) — 43KB
• care-20231231_g1.jpg (GRAPHIC) — 98KB
• care-20231231_g2.jpg (GRAPHIC) — 3KB
• image.jpg (GRAPHIC) — 7KB
• image_1.jpg (GRAPHIC) — 0KB
• 0001829576-24-000016.txt (&nbsp;) — 23655KB
• care-20231231.xsd (EX-101.SCH) — 102KB
• care-20231231_cal.xml (EX-101.CAL) — 211KB
• care-20231231_def.xml (EX-101.DEF) — 503KB
• care-20231231_lab.xml (EX-101.LAB) — 1209KB
• care-20231231_pre.xml (EX-101.PRE) — 905KB
• care-20231231_htm.xml (XML) — 5600KB

Business

Business 6 Item 1A.

Risk Factors

Risk Factors 20 Item 1B. Unresolved Staff Comments 32

C

Item 1 C . Cybersecurity 32 Item 2.

Properties

Properties 33 Item 3.

Legal Proceedings

Legal Proceedings 33 Item 4. Mine Safety Disclosures 33 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 34 Item 6. [ Reserved ] 36 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 36 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 66 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 69 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 125 Item 9A.

Controls and Procedures

Controls and Procedures 125 Item 9B. Other Information 126 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 126 PART III Item 10. Directors, Executive Officers and Corporate Governance 127 Item 11.

Executive Compensation

Executive Compensation 127 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 127 Item 13. Certain Relationships and Related Transactions, and Director Independence 128 Item 14. Principal Accountant Fees and Services 128 PART IV Item 15. Exhibits and Financial Statement Schedules 129 Item 16. Form 10-K Summary 132

Signatures

Signatures 133 Table of Contents Important Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains or incorporates certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that relate to our financial condition, market conditions, results of operations, plans, objectives, outlook for earnings, strategic initiatives and related earn-back periods, revenues, expenses, capital and liquidity levels and ratios, asset levels and asset quality, including but not limited to statements regarding the interest rate environment, the impact of future changes in interest rates, and the impacts of the Company placing its largest lending relationship on nonaccrual status. 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 assumption 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. 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 statemen

BUSINESS

ITEM 1. BUSINESS General Carter Bankshares, Inc. (the "Company") is a holding company headquartered in Martinsville, Virginia with assets of $4.5 billion at December 31, 2023. The Company is the parent company of its wholly owned subsidiary, Carter Bank & Trust (the "Bank"). The Bank is an Federal Deposit Insurance Corporation ("FDIC") insured, Virginia state-chartered commercial bank which operates 65 branches in Virginia and North Carolina. The Bank provides a full range of retail and commercial financial products and services and insurance products. In this Annual Report on Form 10-K, unless the context suggests otherwise, the terms "we," "us" and "our" refer to the Company and its subsidiaries, including the Bank. History and Holding Company Reorganization The Bank commenced business on December 29, 2006, following the effectiveness of the concurrent merger of ten banking institutions. The ten merged banks and their respective main office locations were Blue Ridge Bank, N.A. (Floyd, Virginia); Central National Bank (Lynchburg, Virginia); Community National Bank (South Boston, Virginia); First National Bank (Rock Mount, Virginia); First National Exchange Bank (Roanoke, Virginia); Mountain National Bank (Galax, Virginia); Patrick Henry National Bank (Martinsville, Virginia); Patriot Bank, N.A. (Fredericksburg, Virginia); Peoples National Bank (Danville, Virginia); and Shenandoah National Bank (Staunton, Virginia). The Company was incorporated on October 7, 2020, by and at the direction of the board of directors of the Bank, for the sole purpose of acquiring the Bank and serving as the Bank's parent bank holding company pursuant to a corporate reorganization transaction (the "Reorganization") . On November 9, 2020, the Bank entered into an Agreement and Plan of Reorganization (the "Reorganization Agreement") with the Company and CBT Merger Sub, Inc. (the "Merger Sub"), a wholly-owned subsidiary of the Company, pursuant to which the Reorganization would be eff

BUSINESS - (continued)

ITEM 1. BUSINESS - (continued) Operations The Company is a bank holding company that conducts its business solely through the Bank. The Bank earns revenue primarily from interest on loans and securities and fees charged for financial services provided to customers. The Bank incurs expenses for the cost of deposits, provision for credit losses and other operating costs such as salaries and employee benefits, data processing, occupancy and tax expense. Beginning in 2023, and continuing into 2024 and 2025, the Company is focusing on refining and enhancing its brand image and position in the markets it serves. To strengthen and further shape the culture of the Company, a new set of guiding principles were introduced to associates in June 2023. The guiding principles include a new purpose statement: To create opportunities for more people and businesses to prosper ; supported by our new set of core values: Build Relationships, Earn Trust and Take Ownership. We believe these new guiding principles will help create alignment to support future growth by empowering our associates and igniting a passion for the Company. The Company's goal is to shift from restructuring the balance sheet to pursuing a prudent growth strategy when appropriate. We believe this strategy will be primarily targeted at organic growth, but will also consider opportunistic acquisitions that fit this strategic vision. We believe that the Bank's strong capital and liquidity positions support this strategy. In addition to loan and deposit growth, the Company will seek to increase fee income while closely monitoring operating expenses. The Bank offers a full range of deposit services including Lifetime Free Checking, interest checking accounts, savings accounts, retirement accounts and other deposit accounts of various types, ranging from money market accounts to longer-term CDs. These products and services are available to our personal and business customers. The transaction accounts and CDs are ta

BUSINESS - (continued)

ITEM 1. BUSINESS - (continued) Competition The Bank experiences significant competition in attracting depositors and borrowers. Competition in lending activities comes principally from other commercial banks, savings associations, insurance companies, governmental agencies, credit unions, brokerage firms and other non-bank lenders including mortgage companies and consumer finance companies. Competition for deposits comes from other commercial banks, savings associations, money market and mutual funds, credit unions, insurance companies and brokerage firms. Some of the financial organizations competing with the Bank have greater financial resources than the Bank. Certain of these financial organizations also have greater geographic coverage and some offer bank and bank-related services that the Bank does not offer. Human Capital Management Our associates are the engine that drives our purpose to create opportunities for more people and businesses to prosper. Our core values of building relationships, earning trust, and taking ownership are key to building and maintaining a team-oriented environment with associates that are engaged in open communication to help each other serve, learn, and grow. Our investment in competitive compensation, health benefits, wellness programs, and a focus on healthy work-life integration allows our associates to provide a high level of professional service to our customers. Associates As of December 31, 2023, we employed 679 full-time associates across our two-state footprint. No associates are represented by a collective bargaining unit. For fiscal year 2023, we hired 182 associates and our voluntary separation turnover rate was 13.8%. Compensation, Benefits, and Wellness Our compensation strategy includes the development of job descriptions that are reviewed annually. We use market-based compensation and benefits data to provide competitive salaries and benefits to our associates. We offer paid leave, health benefits, wellness

BUSINESS - (continued)

ITEM 1. BUSINESS - (continued) across our organization and is focused on collecting data and presenting information to management to further the Bank's efforts of identifying focus areas to cultivate a culture that will attract and retain a diverse and inclusive workforce. Here is a snapshot of our diversity metrics as of December 31, 2023: Gender % of Total Workforce Female 77.1 % Male 22.9 % Generation % of Total Workforce Generation Z (1997 and later) 13.0 % Millennials (1981 - 1996) 37.7 % Generation X (1965 – 1980) 32.3 % Baby Boomers (1946 – 1964) 16.3 % Silent Generation (before 1946) 0.7 % Ethnicity % of Total Workforce American Indian / Alaskan Native 0.3 % Asian 1.2 % Black or African American 12.5 % Hispanic or Latino 3.0 % Not specified 2.5 % Two or more races 2.7 % White 77.8 % We continue our commitment to equal employment opportunities by focusing on attracting, developing and retaining a diverse and inclusive workforce. We conducted an annual engagement survey that includes a section to inform the Bank on many areas of engagement, including inclusion. Our leaders continue to use this data to inform decisions on how to continue to develop a diverse and inclusive workforce. Talent Acquisition and Retention We focus on fairness and equitable approaches to create an environment where all of our associates can develop and thrive. Our efforts include ongoing reviews of our selection and hiring practices alongside a continued focus on pay analysis to offer our associates salaries based on their experience, knowledge, skills, abilities, and fit for a position's duties and responsibilities. Our talent acquisition program uses various external partners to reach a diverse population of candidates. We have developed training programs that prepare associates for their roles and responsibilities. Our leaders identify and work with our Human Resources teams to promote associates when opportunities are available. Supervision and Regulati

View Full Filing

View this 10-K filing on SEC EDGAR