Martinsville-based Carter Bank has sold a portfolio of past-due loans connected to U.S. Sen. Jim Justice and his family businesses and valued at more than $200 million.
The loans were sold to “an unaffiliated third party,” the bank said in a Thursday filing with the U.S. Securities and Exchange Commission.
Carter Bank spokesperson Brooks Taylor declined to name the third party. He said that the bank will release more information about the transaction when it files its next earnings report for the first quarter.
The first quarter will end March 31, and the bank typically announces its first-quarter earnings in late April.
Carter Bank received $289.48 million in cash in the transaction. The loans’ principals totaled $209.48 million, according to the Thursday SEC filing.
The loans have not been earning interest since mid-2023, when Carter Bank placed the portfolio — at that time amounting to more than $300 million — in nonaccrual status, which means loan payments weren’t being made.
The loans were personally guaranteed by Justice; his wife, Cathy; and their son, Jay. Jim Justice is a Republican U.S. senator representing West Virginia. He formerly was governor of West Virginia.
The Justice family companies operate coal, agricultural and hospitality businesses in Virginia, West Virginia and North Carolina, including The Greenbrier luxury resort in White Sulphur Springs, West Virginia.
Media contacts for the Justice family companies did not return a message seeking comment on Thursday.
The Justices collectively have been Carter Bank’s largest borrower. Their companies previously owed the bank as much as $775 million before bringing that down to approximately $300 million in April 2023, when the bank took legal action to seek repayment.
The Justices claimed that Carter Bank violated banking laws and prevented the family from working with other lenders. The bank denied the allegation and said that it repeatedly worked with the Justices over the years, but that the family was stalling on repayment.
After clashing in the courts, the bank and the companies announced in June 2023 that they had reached a settlement regarding repayment.
While the Justices’ companies have been paying down the loan balance, Carter Bank said in its fourth-quarter earnings report, filed in January, that it has lost out on $91.2 million in interest income since 2023 due to the loans’ nonaccrual status.
The company said in Thursday’s filing that it estimates the sale of the loans will improve its tangible book value per share by approximately $3.49 per share.
Tangible book value per share is essentially the total value of a company’s physical and financial assets, minus its liabilities, divided by its total number of shares. Reducing nonperforming loans generally improves a bank’s tangible book value per share.
Investors responded favorably to the news, sending the stock price for Carter Bank (NASDAQ:CARE) up by 7.5% to close at $21.94 per share.
Carter Bank has approximately $5 billion in assets and more than 60 branches in Virginia and North Carolina.