Carter Bankshares, Inc. 8-K

What Happened
Carter Bankshares, Inc. announced on March 26, 2026 that its bank subsidiary completed an absolute, “as‑is, where‑is” sale of all loans (later reduced to judgments) related to entities in which James C. Justice, II has an interest. The Company received $289.48 million in cash for the transaction. Immediately prior to the sale the Loans had an outstanding aggregate principal amount of $209.48 million, were all nonperforming and on nonaccrual status, and the Company had recorded a specific reserve of $18.04 million as of December 31, 2025.

Key Details

• Transaction date: March 26, 2026; sale to an unaffiliated third party.
• Cash received: $289.48 million; outstanding principal before sale: $209.48 million.
• Reserve: specific loan reserve of $18.04 million recorded as of 12/31/2025.
• Unaudited pro forma (as if sale occurred 12/31/2025): total assets ≈ $4.95B; total loans ≈ $3.67B; allowance for credit losses ≈ $53.46M (1.46% of loans); nonperforming loans ≈ $29.96M (0.82%). For comparison, reported 12/31/2025 figures were: assets $4.85B, loans $3.88B, ACL ≈ $71.49M (1.84%), and NPLs $243.98M (6.29%).
• Estimated impact: Company estimates the transaction will favorably affect tangible book value per common share by about $3.49.
• Next steps: Detailed effects will be disclosed in the Company’s Q1 2026 earnings release and Form 10‑Q; pro forma figures are unaudited and subject to change.

Why It Matters
This sale removes a large pool of nonperforming loans tied to related-party entities from Carter’s balance sheet and generated immediate cash proceeds of $289.48M. Pro forma figures show a substantial reduction in reported nonperforming loans and a lower allowance-for-credit-losses ratio, while the company estimates a meaningful increase in tangible book value per share. Investors should note the pro forma information is unaudited and preliminary; the company will report final, audited impacts in upcoming quarterly filings.