Carter Bankshares Q2 profit beats, boosted by gain from Bearing Insurance stake sale

Carter Bankshares, Inc.

Carter Bankshares, Inc.

CARE

0.00


Overview

  • U.S. regional bank's Q2 net income and EPS beat analyst expectations

  • Net interest income for Q2 rose 23.5% yr/yr, driven by higher asset yields and lower funding costs

  • Company recognized $35.9 mln gain from insurance unit sale, offset by $12.5 mln portfolio repositioning loss


Outlook

  • Company expects portfolio repositioning to enhance future earnings through higher asset yields

  • Company anticipates additional loan growth from construction lending commitments over next 12-18 months


Result Drivers

  • INSURANCE SALE GAIN - Q2 results included a $35.9 mln gain from the sale of the company's interest in Bearing Insurance Group, which boosted net income and EPS

  • PORTFOLIO REPOSITIONING LOSS - Co incurred a $12.5 mln pre-tax loss from selling lower-yielding securities and purchasing higher-yielding assets, expected to enhance future earnings

  • HIGHER NET INTEREST INCOME - Net interest income rose 23.5% yr/yr, driven by higher yields on assets and lower funding costs after repayment of wholesale borrowings


Company press release: ID:nACSwfs4Pa


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 EPS

Beat

$1.31

$0.76 (4 Analysts)

Q2 Net Income

Beat

$28.91 mln

$9.30 mln (3 Analysts)

Q2 Net Interest Income

$39.95 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the banks peer group is "buy"

  • Wall Street's median 12-month price target for Carter Bankshares Inc is $28.50, about 13.4% below its July 22 closing price of $32.92

  • The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 6 three months ago


Reuters Recommended Reads

  • July 21 - First Community Bankshares Q2 net income more than doubles on stake sale

  • July 23 - TowneBank Q2 revenue more than doubles on near $200 mln sale gain

  • July 23 - Huntington Bancshares' quarterly profit rises on interest income boost


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