Carter Bankshares Inc.
06/26/2024 | Press release | Distributed by Public on 06/26/2024 13:38
Material Event Form 8 K
ITEM 8.01. - Other Events.
Carter Bankshares, Inc. Issues Statement Regarding the Dismissal of Lawsuits Filed by WV Governor Jim Justice and Related Entities
In order to provide clarity and further information regarding the dismissal on June 26, 2024 of the lawsuit filed against Carter Bank & Trust and its board of directors (together "Carter Bank") in the United States District Court for the Southern District of West Virginia (Beckley Division) on November 10, 2023 (the "Federal Lawsuit") by WV Governor James C. Justice, II, his wife Cathy L. Justice, his son James C. Justice, III and various related entities that he and/or they own (collectively the "Justice Entities"), Carter Bankshares, Inc. issues this statement.
Carter Bank has obtained a voluntary dismissal of the Federal Lawsuit "with prejudice." This means that the Justice Entities may not bring any future legal action in any court based on the facts alleged in the Federal Lawsuit. Moreover, in connection with the dismissal of the Federal Lawsuit, the Justice Entities have executed a release that waives any and all causes of action of any kind that they might claim to have against Carter Bank.
Moreover, Carter Bank anticipates the dismissal in the near future, again with prejudice, of the lawsuit filed against Carter Bank in the Circuit Court of Greenbrier County, West Virginia on February 7, 2024 (the "WV Lawsuit") by Greenbrier Sporting Club Development Co., Inc. and Greenbrier Sporting Club, Inc.
In connection with the dismissal of the Federal Lawsuit and the WV Lawsuit, the Justice Entities have agreed upon a pathway of curtailment and payoff of the loans they have outstanding with Carter Bank. The Justice Entities have already started that process of curtailment such that as of the date of this statement, the aggregate nonperforming loan balance associated with the Justice Entities has been reduced from $301.9 million as of the end of the 1stquarter, 2024 to a balance of approximately $294.1 million as of June 20, 2024.
Carter Bank continues to believe that it is fully secured on all loans it has outstanding to and obligations from the Justice Entities. In connection with the dismissal of the Federal Lawsuit and the WV Lawsuit and the execution of a waiver of claims, the Justice Entities have also further enhanced Carter Bank's collateral position, including cross-collateralizations and cross-guarantees, and executed documents reaffirming the legality, validity and binding nature of all loan documents they have executed in favor of Carter Bank.
Important Note Regarding Forward-Looking Statements
Certain matters discussed in this Current Report on Form 8-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to the Company's financial condition, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting the Company and its future business and operations, and specifically including information and expectations related to the WV Lawsuit, the curtailment and payoff of Carter Bank's loans to the Justice Entities, including the reduction of the NPL associated with the Justice Entities from the end of the 1stquarter, 2024 to June 20, 2024,and Carter Bank's collateral position on its loan to the Justice Entities. Forward looking statements are typically identified by words or phrases such as "will likely result," "expect," "anticipate," "estimate," "forecast," "project," "intend," " believe," "assume," "strategy," "trend," "plan," "outlook," "outcome," "continue," "remain," "potential," "opportunity," "comfortable," "current," "position," "maintain," "sustain," "seek," "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Although the Company believes the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements. For a discussion of factors that could affect our business and financial results, see the "Risk Factors" outlined in our periodic and current report filings with the Securities and Exchange Commission. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Company cautions you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.
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