Carter Bankshares, Inc. (CARE): Business Model Canvas [Dec-2025 Updated]

You're trying to get a sharp, precise read on how Carter Bankshares, Inc. actually makes money and creates value right now, especially with their recent performance in hand, so we've mapped their entire operation into the nine essential blocks of the Business Model Canvas. Honestly, what stands out is the foundation: they are sitting on \$4.8 billion in total assets as of September 30, 2025, backed by a strong 10.66% Tier 1 Capital ratio, which speaks volumes about stability. We break down everything from their core deposit acquisition activity and the \$3.8 billion loan portfolio driving their \$96.2 million Net Interest Income year-to-date through Q3 2025, to their key resources like the 64 physical branches and the strategic partnership with First Reliance Bank. Keep reading below to see the full, distilled blueprint of Carter Bankshares, Inc.'s strategy.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Key Partnerships

You're looking at the essential external relationships that keep Carter Bankshares, Inc. running smoothly and growing its footprint, especially after key strategic moves in 2025. These aren't just names on a list; these are the entities that provide regulatory structure, liquidity, and market access. Honestly, for a community bank, these partnerships define the playing field.

Regulatory and Oversight Partnerships

Carter Bankshares, Inc. operates under a dual regulatory structure, which is a key component of its operational framework. As of November 13, 2025, Carter Bank, the wholly-owned banking subsidiary, officially became a state member bank regulated by the Board of Governors of the Federal Reserve System through the Federal Reserve Bank of Richmond. This followed the Company's recent conversion to a financial holding company.

Carter Bankshares, Inc. is the holding company for Carter Bank & Trust, which as of June 30, 2025, was a state-chartered community bank with $4.8 billion in assets. The Bank will continue to be regulated by the Bureau of Financial Institutions of the Virginia State Corporation Commission (SCC), alongside the Federal Reserve Bank of Richmond. This dual oversight is a constant factor in compliance and operational planning.

The key regulatory bodies and their status:

• Federal Reserve Bank of Richmond: Regulator for the holding company and, as of November 2025, the primary federal regulator for the bank subsidiary.
• Virginia State Corporation Commission: Continues to regulate the Bank as a Virginia state-chartered commercial bank.

Market Expansion and Deposit Acquisition Partner

A significant partnership for near-term growth was the transaction with First Reliance Bankshares, Inc. (OTC: FSRL). Carter Bankshares, Inc. completed the Purchase and Assumption agreement on May 27, 2025, acquiring deposits from two First Reliance Bank branches in Mooresville and Winston-Salem, North Carolina. This deal was structured as a deposit-only acquisition, meaning no loans were assumed, which minimized immediate credit risk.

The tangible results of this partnership include:

This move expanded Carter Bankshares, Inc.'s footprint in North Carolina, which, as of Q3 2025, contributed to total assets reaching $4.8B.

Liquidity and Funding Partnership

The Federal Home Loan Bank (FHLB) serves as a critical partner for contingent liquidity and borrowings. You need to know the capacity and current usage here. As of December 31, 2024, the Company had borrowing availability at the FHLB equal to 25.0% of its assets, which approximated $1.2 billion, subject to collateral pledged. The amount of additional borrowing capacity based on eligible collateral was $735.3 million.

The actual usage shows a strategic shift, likely due to deposit growth mentioned in early 2025 filings: FHLB borrowings stood at $70.0 million at December 31, 2024, a significant decrease from $393.4 million at December 31, 2023. More recently, as of March 31, 2025, outstanding advances from the FHLB totaled $435.0 million, carrying fixed interest rates between 3.54% and 3.76%.

Core Technology Vendors

Carter Bankshares, Inc. relies on various third-party vendors to power its digital banking platforms and data processing infrastructure. This is where the bank's operational backbone is outsourced. While the specific contracts and associated financial commitments are generally not disclosed in detail in public filings, the reliance on these partners is inherent to modern banking operations.

What we know about the technology dependency:

• Reliance on vendors for digital banking functionality.
• Use of external providers for critical data processing.
• Need for secure, compliant technology platforms.

To be defintely clear, I don't have specific vendor names or contract values for 2025 in the public data I can access right now. Finance: draft the 13-week cash view by Friday.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Key Activities

You're looking at the core engine of Carter Bankshares, Inc. as of late 2025, focusing on the actions management is taking to drive performance. It's about getting deposits, making loans, and cleaning up legacy issues, all while expanding footprint.

Core deposit acquisition and retention remains central, especially given the competitive environment. The bank continues to lean on its signature product, the "Home of Lifetime Free Checking," which started way back in 1974. Liquidity management saw deposits grow by 3.1% compared to Q3 2024, though total deposits dipped slightly by $11.9 million sequentially to $4.2 billion as of September 30, 2025. You should note that 78.2% of that deposit base is retail customers, which generally implies stickier, lower-cost funding. Also, a branch purchase in Q2 2025 added close to $60 million in funding from First Reliance Bank customers.

Diversified loan origination is showing momentum. Total portfolio loans hit $3.8 billion at September 30, 2025, marking an annualized growth of 9.4%. Loan production funded year-to-date (YTD) stood at 6.77%. The focus on CRE is clear, with loan growth in Q1 2025 showing $46.0 million in CRE loans and $23.8 million in residential mortgages. Furthermore, the pipeline supports future activity, with approximately $450 million in construction loans expected to fund over the next 12 to 18 months.

Active management of the nonperforming loan portfolio is a constant, high-priority activity. The aggregate nonperforming loan (NPL) balance has been systematically reduced, standing at $228.6 million as of September 30, 2025, down from $301.9 million in mid-2023. However, total NPLs ticked up sequentially to $258.6 million at September 30, 2025, representing 6.74% of total portfolio loans. The bulk of this remains tied to the Justice Entities relationship, which accounted for $228.6 million of the NPL balance. Management is actively working this, evidenced by $7.0 million in curtailment payments received during the third quarter of 2025 alone.

Strategic expansion into new markets is moving forward. Carter Bankshares, Inc. operates across Virginia and North Carolina, with 64 branches as of May 23, 2025. The activity in Q2 2025 included completing the purchase of two leased branch facilities in Mooresville and Winston-Salem, North Carolina, and hiring new market executives for both North and South Carolina.

Balance sheet optimization involves tactical adjustments for yield and efficiency. You saw the impact of this in the efficiency ratio improving to 73.43% in Q3 2025 from 78.63% in Q2 2025. The net interest margin (NIM) also expanded to 2.86% in Q3 2025. On the asset side, the bank surrendered $10.5 million of its Bank Owned Life Insurance (BOLI) during the first quarter of 2025, and in Q1 2025, excess cash was redeployed into higher yielding available-for-sale securities.

Here are the key financial metrics tied to these activities as of the end of Q3 2025:

The operational focus areas driving the balance sheet include:

• Securing core deposits, with 78.2% being retail customers.
• Origination pipeline including $450 million in construction loans.
• Managing the largest NPL relationship via curtailments, receiving $7.0 million in Q3 2025.
• Expanding physical presence with 64 branches across Virginia and North Carolina.
• Optimizing asset mix, evidenced by surrendering $10.5 million of BOLI in Q1 2025.

The efficiency ratio improved to 73.43% in Q3 2025, a tangible result of these activities.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Key Resources

You're looking at the core assets backing Carter Bankshares, Inc. as of late 2025. These aren't just line items; they're the engine room.

The balance sheet strength starts with the total size. As of September 30, 2025, Carter Bankshares, Inc. reported Total Assets of \$4.8 billion. That's a solid base for regional operations.

Capital adequacy is key for any bank, and here, the numbers look strong. The Tier 1 Capital ratio stood at 10.66% for the third quarter of 2025. That ratio shows a good buffer against unexpected losses, which is defintely reassuring for stability.

We can lay out the primary financial anchors in a quick view for you:

Funding stability comes from the deposit base. Carter Bankshares, Inc. maintains a \$4.2 billion granular deposit base as of Q3 2025. That's a lot of sticky, local money funding operations.

Physical presence remains a tangible resource, connecting the bank to its communities. You have a network of 64 branches spread across Virginia and North Carolina. This physical footprint supports relationship banking.

Beyond the bricks and mortar, the technology stack is a critical resource now. Carter Bankshares, Inc. deploys its:

• Digital banking platform
• Mobile application

These digital tools allow for service delivery outside the 64 physical locations. It's the blend of the physical network and the digital platform that defines their accessibility right now.

Finance: draft 13-week cash view by Friday.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Value Propositions

You're looking at the core promises Carter Bankshares, Inc. makes to its customers and the market as of late 2025. These aren't just marketing slogans; they are backed by the bank's financial structure and operational focus.

Home of Lifetime Free Checking (signature, long-standing product)

This product is positioned as a no-cost, foundational banking relationship builder. It is a long-standing offering designed to attract and retain customers seeking simplicity and freedom from monthly fees.

The bank also offers alternatives like the Lifetime Plus Checking, which requires 15 point-of-sale debit card transactions and eStatement enrollment to earn interest, with qualifying tiers offering up to 5.00% APY on balances up to $15,000.

Local decision-making and community-focused commercial lending

Carter Bankshares, Inc. emphasizes its local approach to commercial lending, which supports its community focus. This is evident in the portfolio's composition and recent growth figures.

• Total Portfolio Loans as of September 30, 2025: $3.8 billion.
• Annualized Portfolio Loan Growth in Q3 2025: 9.4%.
• Year-over-Year Portfolio Loan Growth (vs. September 30, 2024): $239.8 million.
• Construction loans funded Year-to-Date 2025: Loan production funded at a weighted average rate of 6.77% YTD.
• Future Construction Loan Pipeline: Approximately $450 million expected to fund over the next 12-18 months.

The commercial loan book shows a significant concentration in real estate-backed assets, a key factor in their underwriting focus.

As of December 31, 2024, approximately 94.1% of the commercial loan portfolio was secured by real estate.

Financial stability and well-capitalized position for depositors

Depositor confidence is supported by Carter Bankshares, Inc.'s strong capital and liquidity metrics reported for the third quarter of 2025.

The bank is actively managing its balance sheet, with Total Deposits at $4.2 billion as of Q3 2025. A significant portion, 78.2%, of these deposits comes from retail customers, suggesting a stable funding base.

Full suite of consumer, mortgage, and treasury management services

Carter Bankshares, Inc. provides a comprehensive set of banking tools beyond basic checking, driving core revenue streams.

• Net Interest Income (Q3 2025): $33.7 million.
• Year-over-Year Net Interest Income Increase (Q3 2025 vs. Q3 2024): $4.9 million or 17.1%.
• Net Interest Margin (NIM) in Q3 2025: 2.86%.
• Total Noninterest Income for the nine months ended September 30, 2025: Increased 7.4% year-over-year, partially due to a $1.9 million gain on a BOLI death benefit.

The bank offers consumer loans including auto financing, home equity lines of credit, and credit cards, alongside treasury management services for businesses.

Personalized service and accessible banking solutions

Personalized service is tied to the local branch network and digital accessibility.

• Branch Network: Operates 64 branches across Virginia and North Carolina.
• Digital Tools: Includes Online Banking, Bill Pay, eStatements, and Mobile Check Deposit.
• ATM Access: Nationwide network access via MoneyPass® ATM Network.

The bank is focused on operational efficiency, with the GAAP efficiency ratio improving to 73.43% in Q3 2025 from 78.63% in Q2 2025.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Customer Relationships

You're looking at how Carter Bankshares, Inc. (CARE) maintains its connection with its customer base as of late 2025, which is heavily rooted in a traditional, high-touch community banking approach, even while digital services are present.

Dedicated relationship managers for commercial clients are central to the strategy for business customers. While the exact number of relationship managers isn't public, the focus in 2025 was explicitly on building and enhancing relationships through core deposit acquisition and diversified loan growth. The scale of the operation supporting this is seen in the total portfolio loans, which stood at $3.8 billion at September 30, 2025. The company also integrated new relationships following a branch acquisition in May 2025, which was expected to add close to $60 million in funding to the deposit base.

The community-focused, high-touch service model is physically supported by a network of 64 branches operating across Virginia and North Carolina as of May 23, 2025. This physical presence underpins the bank's identity as a state-chartered community bank. The customer base leans heavily on traditional banking relationships, with the deposit base being 78.2% retail customers as of the third quarter of 2025. This retail focus is a key driver for the bank's overall deposit growth, which was up 3.1% compared to the third quarter of 2024.

Digital self-service via mobile app and online banking is available, though the search results do not provide specific metrics like active user counts or transaction volumes for 2025. However, the bank does generate revenue from digital channels, as evidenced by service charges, commissions and fees increasing by $0.1 million compared to the third quarter of 2024. This suggests ongoing, if not leading, digital transaction activity.

Information regarding proactive Financial Wellness Check consultations is not detailed with specific 2025 figures in the available reports. Still, the emphasis on building long-term, sticky relationships is clear from the management commentary around deposit acquisition and the continuation of signature products like the 'Home of Lifetime Free Checking,' a product launched back in 1974, showing a commitment to enduring customer value.

Here's a quick look at the scale of the customer base and operational footprint as of mid-to-late 2025:

The bank's relationship strategy is also reflected in its capital management, where it continued share repurchases as a way to return value to shareholders, buying back 262,269 shares in the third quarter of 2025 alone.

The core relationship drivers for Carter Bankshares, Inc. (CARE) in 2025 include:

• Maintaining a physical presence with 64 branches.
• Focusing on core deposit acquisition.
• Servicing a base that is predominantly retail, at 78.2%.
• Providing a full range of deposit products.

Finance: draft 13-week cash view by Friday.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Channels

You're looking at how Carter Bankshares, Inc. reaches its customers across Virginia and North Carolina. It's a mix of the traditional handshake and the digital click, which makes sense for a community bank of this size.

The physical footprint remains a core channel. As of September 30, 2025, Carter Bankshares, Inc. operates 64 branches across Virginia and North Carolina. This network supports the bank's $4.8 billion in total assets reported at that date. You should note that this count reflects the completion of the Purchase and Assumption agreement in May 2025, which brought in deposits from two former First Reliance Bank branches in North Carolina. Management had previously stated that this transaction would result in operating 66 locations throughout Virginia and North Carolina, so keep an eye on whether the final count settled at 64 or 66 following any subsequent integration or consolidation.

The physical channel is supported by direct relationship managers.

• Loan officers and commercial market executives drive business development directly.
• These professionals focus on expanding the commercial lending platform.
• The bank noted a 9.4% annualized loan growth as of September 30, 2025, partly attributed to adding seasoned commercial lenders in key markets.

Here's a look at some of the key leadership driving strategy and operations through these channels:

For customers preferring self-service, the digital channels are essential. Carter Bank & Trust offers a full suite of online banking products designed to handle daily transactions remotely. This is how they compete on convenience against larger institutions.

The online banking portal and mobile application provide access to:

• Mobile banking functionality.
• Bill pay services.
• eStatements for paperless record-keeping.
• Mobile deposit capabilities.
• Digital wallet services integration.

The corporate website serves as the primary informational gateway and a key point of entry for new customer acquisition. You can find comprehensive information on the bank's offerings, including its signature product, the "Home of Lifetime Free Checking," which dates back to 1974. Critically, the website supports online account opening, which is a direct digital channel for growing the deposit base. The bank is committed to enhancing its brand image, and the website is central to that effort.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Customer Segments

You're looking at the core groups Carter Bankshares, Inc. serves to generate its revenue, primarily through deposits and loans as of late 2025.

The deposit base shows a strong reliance on individual customers, which management views as a granular and stable funding source. As of the third quarter of 2025, total deposits stood at $4.2 billion.

The composition of these deposits is heavily weighted toward individuals:

• Retail/Consumer customers represent 78.2% of total deposits.

The lending side of the business, which drives interest income, shows growth across several key areas. Total portfolio loans reached $3.8 billion as of September 30, 2025, reflecting an annualized growth of 9.4% since June 30, 2025.

Here is a breakdown of the loan growth experienced in the third quarter of 2025 compared to the end of the second quarter of 2025, which illustrates the focus on these customer segments:

For Small to mid-sized businesses, specifically looking at Commercial and Industrial (C&I) lending, data from the first quarter of 2025 indicated growth in that specific category as well, with C&I loans increasing by $3.5 million compared to December 31, 2024. Management has stated a focus on increasing market share in target growth markets, including C&I.

The bank also serves customers requiring treasury services, which typically accompanies the Small to mid-sized business segment. The overall loan portfolio growth in Q3 2025 was driven by these segments, though the overall portfolio was impacted by a large nonaccrual in the 'Other' segment related to the Justice Entities, which had an aggregate principal balance of $228.6 million on nonaccrual status as of September 30, 2025.

Carter Bankshares, Inc. is also actively expanding its physical footprint to better serve these segments, having completed the acquisition of two North Carolina branches in Q2 2025, which added $55.9 million in deposits.

The bank's focus areas for future growth include enhancing technology, operations, customer experience, C&I, and channel delivery.

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive the engine at Carter Bankshares, Inc. as of late 2025. For a bank, the cost of money-interest expense-is usually the biggest lever, but personnel and technology are climbing fast. Here's the quick math on what it costs to run the operation, based on the latest reported figures, primarily from Q2 and Q3 2025.

Interest Expense on deposits and FHLB borrowings

The cost of funding has been actively managed, benefiting from the Federal Reserve's rate cuts in late 2024. You can see the impact on the cost of deposits, even as the balance of interest-bearing deposits grew due to the branch acquisition.

• Total interest-bearing deposit costs decreased by 16 basis points to 2.70% in the second quarter of 2025 compared to the first quarter of 2025.
• The balance of average interest-bearing deposits increased by \$31.8 million compared to the first quarter of 2025, largely due to the branch purchase.
• Interest Expense for the first quarter of 2025 was \$25,869 thousand.
• Federal Home Loan Bank (FHLB) borrowings increased by \$39.2 million to \$119.5 million in Q2 2025 versus Q1 2025, and further increased to \$175.5 million at September 30, 2025.

Personnel costs for 680 full-time associates (salaries and benefits)

Personnel costs saw a slight uptick in Q2 2025, but the nine-month trend shows a net decrease due to accounting for loan growth. Honestly, managing this line item is always a balancing act between competitive pay and operational efficiency.

• Salaries and employee benefits increased by \$0.4 million in the second quarter of 2025, driven by higher medical expenses and the inclusion of ten full-time associates retained from the Branch Purchase.
• For the nine months ended September 30, 2025, total salary expenses decreased by \$1.3 million compared to the prior year, partially due to higher salary cost deferrals of \$5.0 million associated with higher loan growth.
• Carter Bankshares, Inc. employed 680 total employees as of December 31, 2024, which you are using as the current headcount context for 2025,.

Occupancy and equipment expenses for the branch network

Occupancy costs are directly tied to the physical footprint, so the acquisition of two North Carolina branches in Q2 2025 immediately impacted this line. This is a fixed cost that scales with physical expansion.

• Occupancy expense, net, increased by \$0.4 million in the second quarter of 2025, primarily due to additional software and maintenance expenses and higher depreciation expense resulting from the Branch Purchase.
• For the nine months ended September 30, 2025, occupancy expenses, net, increased by \$1.8 million compared to the same period in 2024.

Data processing and technology costs (increased in 2025)

Technology is definitely an area of rising expense, reflecting the need to keep systems current. You see this reflected in the year-to-date comparisons.

• Data processing expenses increased by \$0.6 million in the first quarter of 2025 compared to the fourth quarter of 2024, due to general inflationary cost increases for service agreements entered into at the start of 2025.
• For the nine months ended September 30, 2025, data processing expenses increased by \$0.7 million compared to the same period in 2024.

Provision for credit losses (recovery of \$2.3 million in Q2 2025)

This is the most volatile cost in banking, reflecting changes in credit outlook rather than fixed operations. The swing from recovery to provision shows how quickly this can change.

• The provision for credit losses in the second quarter of 2025 was a recovery of (\$2.3 million), compared to a recovery of (\$2.0 million) in Q1 2025.
• This swung back to a provision expense of \$2.9 million in the third quarter of 2025.
• The specific reserves with respect to the Bank's largest NPL credit relationship were \$24.0 million at June 30, 2025, down from \$27.1 million at March 31, 2025.

Here is a summary of the key quarterly expense movements impacting the Cost Structure:

Carter Bankshares, Inc. (CARE) - Canvas Business Model: Revenue Streams

You're looking at how Carter Bankshares, Inc. actually brings in the money, which is pretty standard for a community bank but with some specific drivers you need to watch. Their revenue streams are built on the core banking model, but the mix and performance of those streams tell a story about their current asset quality and interest rate positioning.

The primary engine is the spread between what they earn on assets and what they pay on liabilities. For the nine months ended September 30, 2025, Carter Bankshares, Inc. reported \$96.2 million in Net Interest Income (NII). This compares to \$85.3 million for the same nine-month period in 2024. Looking at the most recent quarter, Q3 2025 NII was \$33.7 million, up from \$32.4 million in Q2 2025. That quarterly NII represented a 17.1% increase compared to the year-ago quarter.

This interest income is generated by their earning assets, most notably the loan book. At September 30, 2025, the total portfolio loans for Carter Bankshares, Inc. stood at \$3.8 billion. This represented a 9.4% annualized growth rate from the end of Q2 2025.

Here's a quick look at the key components that feed into the top line, even if the exact breakdown isn't always fully itemized in the public summaries:

Beyond the core lending, non-interest income contributes, though it can be lumpy due to one-time events. For Q3 2025, total noninterest income was \$5.4 million. This was an increase of \$0.5 million, or 9.4%, compared to Q2 2025. The drivers here include service charges and fees, plus income from investments like Bank Owned Life Insurance (BOLI).

The BOLI component provided a notable boost in the first half of the year. Specifically, Carter Bankshares, Inc. recorded a \$1.9 million gain on a BOLI death benefit within other noninterest income during Q1 2025. Management is actively exchanging BOLI to enhance ratings and yields, so you should watch for activity here.

The interest and dividends derived from the securities portfolio are embedded within the Net Interest Income calculation, as the securities portfolio size was approximately \$727.9 million at September 30, 2025. Remember, the overall NII performance is heavily influenced by the bank's liability sensitivity, meaning those recent Federal Reserve rate reductions provided a tailwind to NII by lowering funding costs.

You should track the noninterest income components closely because they are less predictable:

• Noninterest income for the nine months ended September 30, 2025, increased \$1.2 million year-over-year.
• Q3 2025 noninterest income included a \$0.1 million increase in service charges, commissions and fees quarter-over-quarter.
• The Q1 2025 BOLI gain of \$1.9 million significantly lifted that quarter's noninterest income.

Finance: draft 13-week cash view by Friday.