2 unchanged sentences
Legal and administrative proceedings are subject to inherent uncertainties and unfavorable rulings could occur, and the timing and outcome of any legal or administrative proceeding cannot be predicted with certainty.
−Removed: As of September 30, 2025 , the Company is not involved in any material pending or threatened legal proceedings other than proceedings occurring in the ordinary course of business.
−Removed: There have been no material changes in the risk factors faced by the Company from those disclosed in our 2024 Annual Report on Form 10-K .
+Added: Other than as set forth below, as of March 31, 2026, the Company is not involved in any other material pending legal proceedings other than proceedings occurring in the ordinary course of business.
+Added: On April 12, 2026, the Company and the Bank, along with certain unaffiliated third parties, were named as defendants in a lawsuit filed in the Circuit Court of Greenbrier County, West Virginia by James C.
+Added: Justice, II, Cathy L.
+Added: Justice, James C.
+Added: Justice, III and various related entities that he and/or they own and control (such entities, the “Justice Entities” and collectively, the “Plaintiffs”).
+Added: The allegations contained in the lawsuit relate to a series of loans, which were later reduced to judgments (such loans subsequently reduced to judgments, the “Judgments”) made by the Bank to certain Justice Entities that are secured by collateral pledged by certain Justice Entities and are backed by personal guarantees from James C.
+Added: Justice, II and Cathy L.
CARTER BANKSHARES, INC.
AND SUBSIDIARIES
+Added: Justice and, in certain cases, by personal guarantees from James C.
+Added: Justice, III.
+Added: The allegations contained in the lawsuit also relate to a transaction in which the Bank sold its interest in the Judgments and related collateral to one of the unaffiliated third-party defendants.
+Added: In the lawsuit the Plaintiffs allege that the Bank (i) breached an implied covenant of good faith and fair dealing, (ii) tortiously interfered with Plaintiffs’ business interests, (iii) harmed Plaintiffs through a series of allegedly misleading promises, representations and/or omissions on which Plaintiffs allegedly relied, (iv) tortiously interfered with the Plaintiffs’ business interests under agreements between Plaintiffs and the unaffiliated third-party defendants, and (v) together with the unaffiliated third-party defendants, participated in a scheme to restrain trade and competition in an alleged market in the which certain collateral securing the Judgments operates.
+Added: With respect to the Bank, the Plaintiffs have requested the court to rescind the Bank’s sale of the Judgments to the unaffiliated third-party purchaser and seek declaratory relief that the Plaintiffs are entitled to pay-off the Judgments at no more than the sale price.
+Added: The Plaintiffs further seek injunctions against the unaffiliated third-party defendants, direct damages of at least $500 million and additional consequential and punitive damages, and payment of costs, expenses and attorneys’ fees.
+Added: The Company and the Bank deny the allegations contained in the lawsuit and intend to vigorously defend the matter, the validity of the Bank’s sale of the Judgments to the unaffiliated third-party purchaser and the Bank’s conduct prior to selling the Judgments.
+Added: Based on information presently available to the Company and the Bank and based on consultation with legal counsel, the Company believes that the Company and the Bank have meritorious defenses to all allegations contained in the lawsuit.
+Added: At this early stage of the lawsuit, the Company is not yet able to make a determination as to the likelihood of an unfavorable outcome in this matter or to estimate the range of any possible loss.
+Added: There have been no material changes in the risk factors faced by the Company from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 .
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.