Why did CARE's actual EPS consistently miss forecasts in 2024?

Carter Bankshares Inc. (CARE) experienced a consistent discrepancy between its actual Earnings Per Share (EPS) and forecasts in 2024 due to several key factors: 1. **Revenue Shortfall**: Although the bank's net interest income showed improvement, it fell short of market expectations. For instance, in Q4 2024, net interest income reached $29.1 million, missing the estimated revenue of $35.60 million. This trend was evident across multiple quarters, indicating a persistent challenge for the bank in generating revenue as anticipated. 2. **Efficiency Ratio**: The bank's efficiency ratio, which measures the percentage of revenue not spent on overhead, improved significantly from 94.8% in Q4 2023 to 83.6% in Q4 2024. While this reflects better operational efficiency, it also suggests that a portion of the revenue was previously absorbed by higher operational costs, which could have contributed to the EPS shortfall. 3. **Nonperforming Loans**: The reduction in nonperforming loans, which decreased by $28.4 million to $259.3 million as of December 31, 2024, is a positive indicator for credit quality. However, the process of resolving and curtailing these loans might have temporarily impacted revenue, thereby affecting EPS. 4. **Strategic Initiatives**: The bank's strategic focus on loan and deposit growth, as well as its efforts to manage nonperforming loans, have been crucial for its financial recovery. While these initiatives are beneficial in the long term, they might have required significant investments or adjustments, which could have temporarily strained financial performance and contributed to EPS misses. In summary, while Carter Bankshares has demonstrated significant improvements in financial performance, the bank's actual EPS has consistently fallen short of forecasts due to revenue shortfalls, operational efficiency adjustments, and strategic initiatives that require careful management to avoid short-term disruptions in financial results.