The credit quality transformation is the key story: NPLs collapsed from 6.74% to 0.74% after the large NPL sale, and the loan book is now growing organically (ex-NPL). Watch whether the elevated provision in Q3 is a one-time cleanup or signals new credit stress, and monitor deposit trends for funding cost trajectory.
How the stock moved after the report
NEUTRAL VIEWSTOCK ABOVE ENTRY AT T+1- T+0 · Nov 3 $28.54entry
- T+1 · 13h ago +2.52%α +0.87% · $29.26
- T+5 · in 5d Pending
- T+20 · in 27d Pending
- T+60 · in 3mo Pending
Price Chart
REPLAYWatch the reaction play outHow similar events traded
Executive Summary
Carter Bankshares filed an investor presentation for Q3 2026, showing net interest income up 22% YoY to $41.2M, adjusted EPS up 35% YoY to $0.35, and a sharp improvement in asset quality with NPLs falling from 6.74% to 0.74% of portfolio loans following the resolution of its largest nonperforming relationship. However, GAAP net income declined 73% QoQ to $7.8M due to the absence of prior-quarter gains, and total deposits continued to shrink.
Key Facts
- Net interest income Q3 2026: $41.2M, up 22.3% from $33.7M in Q3 2025
- Adjusted diluted EPS Q3 2026: $0.35, up 34.6% from $0.26 in Q3 2025
- GAAP net income Q3 2026: $7.8M, down 73.2% from $28.9M in Q2 2026 (which included a $35.9M insurance gain)
- NPLs to total portfolio loans: 0.74% at Sep 30 2026 vs 6.74% at Sep 30 2025
- Net interest margin (FTE) Q3 2026: 3.55%, up from 2.87% in Q3 2025
- Total deposits: $4.12B at Sep 30 2026, down 2.2% from $4.21B a year earlier
- Provision for credit losses Q3 2026: $10.5M, up from $2.9M in Q3 2025
- CET1 ratio: 14.24% at Sep 30 2026, well above well-capitalized minimum
- Share repurchases: 74,151 shares at $2.2M in Q3 2026; $5.1M YTD
Financial Impact
Core earnings power improving (NII +22% YoY, NIM +68bp YoY), but provision expense spiked to $10.5M from $2.9M, and deposits continue to decline. The large NPL resolution has transformed the credit profile.
Risk Factors
- Provision for credit losses jumped to $10.5M in Q3 from $2.0M in Q2 and $2.9M in Q3 2025, despite improving NPL ratios
- Total deposits declined $93M YoY to $4.12B, with CDs down $122M
- GAAP net income fell 73% QoQ due to non-recurring gains in Q2
- Net charge-offs annualized were 1.28% in Q3 vs (0.07)% in Q2, a significant reversal
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001829576-26-000094 |
| Document: care-20261103.htm | 0001829576-26-000094 |
| Document: 0001829576-26-000094-index-headers.html | 0001829576-26-000094 |
| Document: 0001829576-26-000094-index.html | 0001829576-26-000094 |
| Document: 0001829576-26-000094.txt | 0001829576-26-000094 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Nov 3, 2026 1d ago | 8-K | $28.54 $29.26 | ▲ +2.52% | ▲ +0.87% | $29.26 (+2.52%) |
Oct 29, 2026 6d ago | 8-K | $29.89 $29.00 | ▼ −2.98% | ▼ −1.20% | $29.26 (−2.11%) |
Oct 29, 2026 6d ago | 8-K | $29.89 $29.00 | ▲ +2.98% | ▲ +1.20% | $29.26 (+2.11%) |
Oct 8, 2026 27d ago | SC 13G/A | $30.47 $30.16 | ▼ −1.02% | ▼ −1.62% | $29.26 (−3.97%) |
Aug 17, 2026 11w ago | 8-K | $31.53 $30.86 | ▼ −2.13% | ▼ −2.33% | $29.26 (−7.20%) |
Aug 7, 2026 12w ago | Institutional Cluster | $33.00 $31.72 | ▼ −3.88% | ▼ −3.85% | $29.26 (−11.33%) |
Jul 30, 2026 13w ago | Insider Cluster | $34.13 $34.58 | ▲ +1.32% | ▲ +0.60% | $29.26 (−14.27%) |
Jul 30, 2026 13w ago | Insider Cluster | $34.13 $34.58 | ▲ +1.32% | ▲ +0.61% | $29.26 (−14.27%) |
Jul 27, 2026 14w ago | 8-K | $34.07 $34.54 | ▲ +1.38% | ▲ +1.14% | $29.26 (−14.12%) |
Jul 23, 2026 14w ago | 8-K | $33.90 $34.01 | ▲ +0.32% | ▲ +0.22% | $29.26 (−13.69%) |
US Market Status
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