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

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

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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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)