Carter Bankshares, Inc.CARE
Carter Bankshares, Inc. Revenue Disclosure
REVENUE FROM CONTRACTS WITH CUSTOMERS
Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”), does not apply to revenue associated with financial instruments, including interest income and fees earned on loans and investment securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are outside the scope of Topic 606.
Topic 606 applies to certain noninterest revenue streams, including trust and asset management income, deposit related fees, interchange fees, merchant income, and annuity and insurance commissions and returns on investment. The adoption of Topic 606 did not result in a significant change in the timing or measurement of revenue recognition for these in-scope revenue streams. Substantially all of the Company’s revenue is generated from contracts with customers.
Service Charges on Deposit Accounts: Service charges on deposit accounts include overdraft fees, fees on returned checks, stop payment fees, check chargeback fees, minimum balance fees, and other deposit account related fees. Overdraft fees are recognized at the point in time the overdraft occurs. Fees on returned checks are recognized when the check is returned. Transaction-based fees, including stop payment fees, check chargeback fees, and other deposit account related fees, are recognized at the point in time the Company fulfills the customer’s request. Minimum balance fees are system-assessed and recognized at the point in time the customer’s account balance falls below the required minimum. Service charges on deposit accounts are generally withdrawn directly from the customer’s account balance.
Other Fees and Other Income: Other fees and other income include safe deposit box rental fees, money order fees, check cashing and cashiers’ check fees, wire transfer fees, letter of credit fees, check order income, and other miscellaneous fees. These fees are primarily transaction-based, and revenue is recognized at the point in time the related service is provided. Payment for these services is generally received immediately or in the following month through a direct charge to a customer’s account.
Debit Card Interchange Fees: The Company earns interchange fees from debit cardholder transactions processed through card payment networks. Interchange fees represent a percentage of the underlying transaction value and are recognized daily as the related transaction processing services are performed.
Insurance: Commission income is earned based on customer transactions and is recognized when the related transaction is completed. The Company also receives a return on its investment in Bearing Insurance Group, LLC, which is recognized annually based on the investee’s results and the Company’s ownership interest.
OREO Income: The Company occasionally owns properties acquired through foreclosure that are classified as OREO on the Consolidated Balance Sheets. Rental income earned on OREO properties is recognized over the rental period as earned, with payments generally received monthly.
Gain or losses on the sale of OREO are recognized when control of the property transfers to the buyer, which typically occurs upon execution and delivery of the deed. When the Company finances the sale of OREO, it evaluates whether the buyer is committed to perform under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is disposed and the related gain or loss is recorded upon transfer of control. If a significant financing component is present, the transaction price and related gain or loss are adjusted accordingly.
The following table summarizes the point of revenue recognition and the income recognized for each of the revenue streams for the years ended December 31:
| (Dollars in Thousands) | Point of Revenue Recognition | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| In-Scope Revenue Streams | ||||||||||||||||||||||||||
| Service Charges on Deposit Accounts | At a point in time | $ | 5,826 | $ | 5,856 | $ | 5,534 | |||||||||||||||||||
| Other Fees and Other Income | At a point in time | 3,826 | 1,983 | 1,885 | ||||||||||||||||||||||
| Debit Card Interchange Fees | At a point in time | 7,935 | 7,843 | 7,828 | ||||||||||||||||||||||
| Insurance | ||||||||||||||||||||||||||
| Customer Commissions | At a point in time | 195 | 166 | 131 | ||||||||||||||||||||||
| Annual Commission on Investment | Over time | 2,475 | 3,476 | 1,814 | ||||||||||||||||||||||
| Special Production Payout | Over time | 58 | 43 | — | ||||||||||||||||||||||
| Other Real Estate Owned Income | At a point in time | — | 46 | 75 | ||||||||||||||||||||||
| Gains (Losses) on Sale of Other Real Estate Owned | At a point in time | *** | *** | *** | ||||||||||||||||||||||
| Total In-Scope Revenue Streams | 20,315 | 19,413 | 17,267 | |||||||||||||||||||||||
| Out of Scope Revenue Streams | ||||||||||||||||||||||||||
| Gains (Losses) on Sales of Securities, net | 46 | 68 | (1,521) | |||||||||||||||||||||||
| Bank Owned Life Insurance Income | 1,511 | 1,473 | 1,381 | |||||||||||||||||||||||
| Commercial Loan Swap Fee Income | — | — | 139 | |||||||||||||||||||||||
| Other | 532 | 414 | 1,012 | |||||||||||||||||||||||
| Total Noninterest Income | $ | 22,404 | $ | 21,368 | $ | 18,278 | ||||||||||||||||||||
***Reported net with Losses on Sales and Write-downs of Other Real Owned in Noninterest Expense
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 11, 2022 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.