UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 North Carolina 56-2132396 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) For the transition period from __________ to __________ 000-27205 (Commission ...

EARNINGS RELEASE EXHIBIT (99)(a) Jeffrey N. Hooper Executive Vice President and Chief Financial Officer 828-464-5620 For Immediate Release EX-99.A 2 pebk_ex99a.htm PRESS RELEASE July 21, 2025 Contact: William D. Cable, Sr. President and Chief Executive Officer PEOPLES BANCORP ANNOUNCES SECOND QUARTER 2025 RESULTS Peoples Bancorp of North Carolina, Inc. (NASDAQ: PEBK) (the "Company"), the parent company of Peoples Bank (the "Bank"), reported second quarter 2025 results with highlights as follows: Second quar ...

Financial Performance - The Company reported a net earnings of $4,345 thousand for the three months ended March 31, 2025, resulting in a basic earnings per share of $0.82, compared to $3,948 thousand and $0.74 for the same period in 2024[37][38]. - Net income for the three months ended March 31, 2025, was $4.3 million, or $0.82 per share, compared to $3.9 million, or $0.74 per share, for the same period in 2024, reflecting an increase of approximately 8.5%[129]. - Net interest income increased to $13.9 million for the three months ended March 31, 2025, from $13.3 million in the prior year, driven by a $160,000 increase in interest income and a $480,000 decrease in interest expense[132]. - Non-interest income rose to $6.5 million for the three months ended March 31, 2025, compared to $6.0 million in the same period of 2024, driven by a $628,000 increase in appraisal management fee income[142]. - Non-interest expense was $14.6 million for the three months ended March 31, 2025, slightly up from $14.5 million in the same period of 2024, with a notable increase in appraisal management fee expense[143]. Investment Securities - The total unrealized losses in the investment securities portfolio relating to debt securities amounted to $43.8 million as of March 31, 2025, down from $51.1 million at December 31, 2024, indicating a temporary impact due to changing interest rates[42]. - The Company’s total investment securities available for sale decreased from $438.8 million at December 31, 2024, to $374.4 million at March 31, 2025[39]. - The amortized cost of investment securities available for sale at March 31, 2025, was $417.9 million, with a fair value of $374.4 million, reflecting a decrease in value[43]. - The total fair value of investment securities available for sale was $374.350 million as of March 31, 2025, down from $388.003 million on December 31, 2024, indicating a decrease of approximately 3.5%[116]. Loans and Credit Quality - The Company’s loans classification data is pending further details, with a focus on real estate loans as of March 31, 2025[46]. - The Company did not identify any credit-related losses in its analysis as of March 31, 2025, indicating a stable credit environment[42]. - Total real estate loans increased to $1,063,210 thousand as of March 31, 2025, up from $1,047,952 thousand at December 31, 2024, representing a growth of 1.5%[48]. - The allowance for credit losses was $10,047 thousand as of March 31, 2025, compared to $9,995 thousand at December 31, 2024, indicating a slight increase in risk assessment[48]. - Non-accrual loans totaled $4,686 thousand as of March 31, 2025, up from $4,440 thousand at December 31, 2024, reflecting a rise of 5.5%[54]. - The total allowance for credit losses for real estate loans was $27 thousand as of March 31, 2025, compared to no allowance at December 31, 2024, reflecting a new risk assessment[58]. - The total loans not secured by real estate reached $88,870 thousand, contributing to an overall total of $1,152,080 thousand in loans[78]. - The provision for credit losses increased to $268,000 for the three months ended March 31, 2025, compared to $91,000 for the same period in 2024, reflecting a rise due to increased unfunded commitments[132]. Deposits and Liquidity - Total deposits amounted to $1.518 billion as of March 31, 2025, compared to $1.485 billion on December 31, 2024, reflecting an increase of about 2.2%[116]. - Estimated uninsured deposits decreased to $354.7 million, or 23.37% of total deposits, down from $396.5 million, or 26.71% at December 31, 2024[166]. - The liquidity ratio improved to 29.70% at March 31, 2025, compared to 28.16% at December 31, 2024, exceeding the minimum required ratio of 10%[178]. Capital Adequacy - Shareholders' equity increased to $138.5 million, or 8.18% of total assets, from $130.6 million, or 7.90% at December 31, 2024[179]. - The Company's Tier 1 capital ratio was 14.58% at March 31, 2025, compared to 14.47% at December 31, 2024, indicating strong capital adequacy[185]. - Total risk-based capital ratio stood at 15.46% at March 31, 2025, up from 15.34% at December 31, 2024, reflecting a solid capital position[185]. - The Bank is classified as "well capitalized" based on regulatory guidelines as of March 31, 2025[187]. Accounting and Reporting - The Company’s accounting policies have not changed significantly since December 31, 2024, ensuring consistency in financial reporting[29]. - The adoption of new accounting standards is not expected to have a material impact on the Company’s financial position or results of operations[30][31]. - No changes in internal control over financial reporting occurred that materially affected the Bank's financial reporting during the reporting period[188]. Miscellaneous - The Company has two reportable segments: Banking Operations and CBRES, with the primary revenue source for Banking Operations being net interest income[117]. - The Company is not involved in any material pending legal proceedings, only routine proceedings in the ordinary course of business[189]. - A new stock repurchase program was authorized in March 2025, allowing up to $3.0 million for repurchasing common stock, with no shares repurchased as of March 31, 2025[182].

Financial Performance - Net earnings for Q1 2025 were $4.3 million, or $0.82 per share, compared to $3.9 million, or $0.74 per share, in Q1 2024, representing a 10.3% increase in earnings per share [3]. - Net earnings for the first quarter of 2025 were $4,345 thousand, reflecting an increase of 10.0% from $3,948 thousand in Q1 2024 [17]. - The return on average assets improved to 1.07% for the three months ended March 31, 2025, compared to 0.96% in Q1 2024 [18]. - Cash dividends increased to $0.36 per share in Q1 2025, compared to $0.35 per share in the prior year period [6]. - The effective tax rate for Q1 2025 was 22.85%, up from 16.62% in Q1 2024, primarily due to prior tax adjustments [8]. Income and Revenue - Net interest income increased to $13.9 million in Q1 2025 from $13.3 million in Q1 2024, driven by an increase in interest income on loans [4]. - Net interest income for the three months ended March 31, 2025, was $13,944 thousand, up 4.8% from $13,304 thousand in the same period of 2024 [17]. - Non-interest income rose to $6.5 million in Q1 2025, up from $6.0 million in Q1 2024, primarily due to a $628,000 increase in appraisal management fee income [5]. - Total non-interest income rose to $6,529 thousand, an increase of 8.1% from $6,038 thousand in Q1 2024 [17]. Assets and Loans - Total loans reached $1.15 billion as of March 31, 2025, compared to $1.14 billion at December 31, 2024, indicating a growth in lending activity [6]. - Net loans reached $1,142,033 thousand, a rise of 1.2% from $1,128,409 thousand at the end of 2024 [16]. - Total assets increased to $1,692,985 thousand as of March 31, 2025, up from $1,651,962 thousand at December 31, 2024, representing a growth of 2.0% [16]. Deposits and Equity - Total deposits increased to $1.52 billion as of March 31, 2025, up from $1.48 billion at December 31, 2024, reflecting a strong deposit base [12]. - Total deposits grew to $1,517,569 thousand, an increase of 2.2% compared to $1,484,731 thousand at December 31, 2024 [16]. - Shareholders' equity rose to $138.5 million, or 8.18% of total assets, as of March 31, 2025, compared to $130.6 million, or 7.90% of total assets, at December 31, 2024 [13]. Credit Quality - Non-performing assets were $5.1 million, or 0.30% of total assets, as of March 31, 2025, compared to $4.8 million, or 0.29% of total assets, at December 31, 2024 [10]. - The allowance for credit losses on loans was $10.0 million, or 0.87% of total loans, as of March 31, 2025, consistent with the previous quarter [11]. - The provision for credit losses was $268 thousand for the three months ended March 31, 2025, compared to $91 thousand in the same period of 2024 [18]. - The allowance for credit losses on loans decreased to $10,047 thousand as of March 31, 2025, down from $10,847 thousand a year earlier [18]. Margins - The net interest margin (tax equivalent) increased to 3.51% for the three months ended March 31, 2025, up from 3.33% in the same period of 2024 [18].

Core Viewpoint - Peoples Bancorp of North Carolina, Inc. has authorized a stock repurchase program of up to $3.0 million to enhance shareholder value based on the strength of its balance sheet and capital position [1][2] Financial Overview - As of December 31, 2024, the company reported total assets of $1.65 billion and shareholders' equity of $130.6 million [1] Stock Repurchase Program Details - The stock repurchase may occur periodically in the open market or through privately-negotiated transactions, with the timing and amount determined by management based on market conditions [1] - The repurchase program can be suspended at any time without prior notice [1] Company Operations - Peoples Bank operates 16 banking offices across several counties in North Carolina, including Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake [3] - The company also has loan production offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties [3] - The common stock of the company is publicly traded on the Nasdaq Global Market under the symbol "PEBK" [3]

Financial Position - As of December 31, 2024, the Company had total assets of $1.7 billion, net loans of $1.1 billion, deposits of $1.5 billion, total securities of $390.7 million, and shareholders' equity of $130.6 million[14]. - The Bank's total deposits amounted to $1.48 billion as of December 31, 2024, indicating a reliance on customer deposits for funding[114]. - The two largest deposit relationships represented 7.88% of total deposits, amounting to $117.0 million, highlighting potential funding risks[113]. - Adverse economic conditions in the Catawba Valley region could materially affect the Bank's financial condition and capital adequacy[100]. - Inflation has risen significantly, impacting customers' ability to repay loans, which could lead to increased loan delinquencies[101]. - The allowance for credit losses may be insufficient, potentially leading to significant future losses and adversely affecting operating results[108]. Lending and Deposit Activities - The Bank's legal lending limit was $29.1 million, with the largest credit relationship at $19.1 million as of December 31, 2024[28]. - The Bank's loans-to-one-borrower limit is set at $29.1 million, which can increase to $48.6 million for fully secured loans[74]. - The Bank's lending activities are guided by non-discriminatory underwriting standards and procedures established by the Board of Directors[25]. - The Bank's core deposit base has grown due to economic growth in the market area and the implementation of new competitive deposit products[23]. Regulatory Compliance - The Company is subject to the Dodd-Frank Act and the Economic Growth Act, which have significant implications for regulatory compliance and capital requirements[52]. - The Company must obtain Federal Reserve approval for common stock repurchases exceeding 10% of net worth during any twelve-month period[62]. - The Company is required to maintain a Tier 1 leverage capital ratio of at least 5.0% to be considered well-capitalized under revised definitions[66]. - The Company is subject to examination by the FDIC and must adhere to various state and federal laws and regulations[94]. - The Company has established an anti-money laundering program to comply with the Bank Secrecy Act (BSA) requirements[89]. - The Company is required to disclose material cybersecurity incidents within four days of determining their significance[87]. Capital and Investment Management - As of December 31, 2024, the Bank exceeded all minimum capital requirements with a Tier 1 leverage capital ratio of 10.71% and a total risk-based capital ratio of 15.22%[55]. - The investment policy aims to maximize earnings while maintaining liquidity and ensuring the safety of principal[39]. - The Bank's investment portfolio is managed to mitigate interest rate risk and comply with regulatory guidelines[37]. - The Company redeemed $5.0 million of outstanding trust preferred securities in 2019, with a total of $20.6 million issued in 2006[19]. Employee and Operational Information - The Company employed 281 full-time employees and 13 part-time employees, equating to 288 full-time equivalent employees as of December 31, 2024[41]. - The Company is committed to fostering professional and personal growth through continuing education and development programs for employees[47]. - The company processed large volumes of transactions daily involving millions of dollars, exposing it to various operational risks, including fraud and unauthorized transactions[122]. Risk Factors - Changes in interest rates can adversely affect the Bank's income by reducing the interest spread between loans and deposits[112]. - Cybersecurity incidents pose risks to business operations and could result in reputational damage and increased costs[116]. - The Bank's business continuity plans may prove inadequate, leading to disruptions that negatively impact financial condition[117]. - The company is exposed to liquidity risk, which could impair its ability to fund operations and jeopardize its financial condition[131]. - Operational risks include potential losses from errors, omissions, or fraudulent behavior by employees and third parties[153]. Shareholder Information - As of February 28, 2025, the company had 657 shareholders of record[180]. - The company's cumulative shareholder return on common stock was 111.68 as of December 31, 2024, compared to 223.87 for the NASDAQ Composite Index[184]. - The company purchased a total of 1,275 shares in the open market during the three months ended December 31, 2024, at an average price of $26.86 per share[187]. - The maximum dollar value of shares that may yet be purchased under the company's stock repurchase program is $2,000,000[187]. Internal Controls and Governance - The company maintained effective internal control over financial reporting as of December 31, 2024, based on management's assessment[196]. - There were no changes in internal control over financial reporting during the quarter ended December 31, 2024, that materially affected the company's internal controls[193]. - The company’s management believes that its disclosure controls and procedures are effective to ensure timely and accurate reporting[192]. - The company has not reported any disagreements with accountants on accounting and financial disclosure[190].

Financial Performance - Net earnings for Q4 2024 were $3.6 million, or $0.67 per share, compared to $3.4 million, or $0.64 per share, in Q4 2023, reflecting a 5.9% increase in earnings per share [3]. - For the full year 2024, net earnings were $16.4 million, or $3.08 per share, compared to $15.5 million, or $2.87 per share, in 2023, indicating a 7.4% increase in earnings per share [8]. - Net earnings for the year ended December 31, 2024, reached $16,353 thousand, up 5.2% from $15,546 thousand in 2023 [21]. - Basic net earnings per share for the year ended December 31, 2024, were $3.08, up from $2.87 in 2023, representing a growth of 7.3% [21]. Income and Expenses - Net interest income for Q4 2024 was $13.8 million, up from $13.3 million in Q4 2023, driven by a $1.2 million increase in interest income [4]. - Non-interest income for Q4 2024 was $7.1 million, an increase from $6.1 million in Q4 2023, primarily due to a $900,000 rise in appraisal management fee income [6]. - Non-interest expense for Q4 2024 was $16.5 million, compared to $14.6 million in Q4 2023, reflecting a 12.9% increase [7]. - Interest income for the year ended December 31, 2024, was $80,733 thousand, a 12.3% increase from $71,862 thousand in 2023 [21]. Loans and Deposits - Total loans increased to $1.14 billion as of December 31, 2024, compared to $1.09 billion a year earlier, marking a 4.6% growth [5]. - Total deposits reached $1.48 billion as of December 31, 2024, up from $1.39 billion a year prior, representing a 6.5% increase [16]. - Total deposits increased to $1,484,731 thousand in 2024, compared to $1,392,045 thousand in 2023, an increase of 6.6% [19]. - Net loans rose to $1,128,409 thousand in 2024, up from $1,082,025 thousand in 2023, marking an increase of 4.3% [19]. Credit Quality - The provision for credit losses for Q4 2024 was a recovery of $205,000, compared to an expense of $405,000 in Q4 2023, indicating improved credit quality [4]. - Non-performing assets were $4.4 million, or 0.27% of total assets, at December 31, 2024, compared to $3.9 million, or 0.24% of total assets, at December 31, 2023 [5]. - The allowance for credit losses on loans decreased to $10.0 million, or 0.88% of total loans, at December 31, 2024, down from $11.0 million, or 1.01%, at December 31, 2023 [15]. - The allowance for credit losses on loans decreased to $9,995 thousand in 2024 from $11,041 thousand in 2023, a reduction of 9.5% [25]. - Non-performing assets increased to $4,809 thousand in 2024, compared to $3,887 thousand in 2023, reflecting a rise of 23.7% [25]. Assets and Margins - Total assets increased to $1,651,962 thousand as of December 31, 2024, compared to $1,635,910 thousand in 2023, reflecting a growth of 0.8% [19]. - The net interest margin (tax equivalent) improved to 3.39% for the three months ended December 31, 2024, compared to 3.32% in 2023 [24]. - The return on average assets for the year ended December 31, 2024, was 0.85%, slightly up from 0.84% in 2023 [24]. Tax and Risk - The Company benefits from tax-exempt loans and securities, computed using an effective tax rate of 22.98% [26]. - For the years ended December 31, 2024 and 2023, the risk grade remains at 0.00% [27].

Core Viewpoint - Peoples Bancorp of North Carolina, Inc. has declared a special cash dividend of $0.16 per share, which will be paid on February 14, 2025, to shareholders of record on February 3, 2025 [1] Company Information - Peoples Bank operates 16 banking offices across North Carolina, specifically in Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake Counties, and has loan production offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties [3] - The company's common stock is publicly traded on the Nasdaq Global Market under the symbol "PEBK" [3] Dividend Information - Shareholders are encouraged to enroll in the Company's Dividend Reinvestment and Stock Purchase Plan, with contact details provided for inquiries [2]

Financial Performance - The Company reported a net earnings of $3,958,000 for the three months ended September 30, 2024, resulting in a basic earnings per share of $0.74 and diluted earnings per share of $0.72[35]. - For the nine months ended September 30, 2024, net earnings totaled $12,794,000, leading to a basic earnings per share of $2.41 and diluted earnings per share of $2.33[35]. - The company reported a net income of $3,958,000 for the three months ended September 30, 2024, compared to $4,127,000 for the same period in 2023, indicating a decrease of 4.1%[115]. - Year-to-date net earnings for the nine months ended September 30, 2024, were $12.8 million, or $2.41 per share, compared to $12.1 million, or $2.22 per share, for the same period in 2023[126]. Comprehensive Income - The accumulated other comprehensive loss decreased from $(50,989,000) as of September 30, 2023, to $(30,938,000) as of September 30, 2024[32]. - The Company reported a net current period other comprehensive gain of $8,372,000 for the three months ended September 30, 2024[32]. Investment Securities - The fair value of investment securities available for sale as of September 30, 2024, was $398,573,000, with gross unrealized losses of $40,594,000[36]. - The Company’s total amortized cost of investment securities was $438,738,000 as of September 30, 2024, compared to $443,029,000 as of December 31, 2023[37]. - The Company experienced unrealized losses on U.S. Treasuries amounting to $606,000 as of September 30, 2024[36]. - The Company’s investment in GSE - Mortgage-backed securities had a fair value of $229,917,000 as of September 30, 2024, with gross unrealized losses of $17,900,000[36]. - As of September 30, 2024, unrealized losses in the investment securities portfolio related to debt securities totaled $40.6 million, attributed to changing interest rates and considered temporary[39]. - The total unrealized losses across all investment securities as of September 30, 2024, were $51.3 million, reflecting the impact of interest rate fluctuations[39]. Loans and Credit Quality - Total loans as of September 30, 2024, amounted to $1,124.2 million, an increase from $1,093.1 million at December 31, 2023, representing a growth of approximately 2.8%[43]. - The total net loans as of September 30, 2024, were $1,113.6 million, compared to $1,082.0 million at December 31, 2023, indicating an increase of about 2.9%[43]. - The company reported a total of 5,841 past due loans as of September 30, 2024, with 3,922 classified as nonaccrual loans[49]. - The company has a diversified loan portfolio, with a significant portion collateralized by real estate, which is subject to market fluctuations[43]. - As of September 30, 2024, total nonaccrual loans amounted to $3,922, with $3,656 in real estate loans and $250 in commercial loans[53]. - The allowance for credit losses increased to $10,616 as of September 30, 2024, up from $10,016 at the end of the previous quarter[64]. - During the three months ended September 30, 2024, the provision for loan losses was $703, contributing to the ending balance of the allowance for credit losses[64]. - The total allowance for credit losses, including loan commitments, reached $11,775 as of September 30, 2024[64]. - The bank modified one $30,000 loan for a borrower experiencing financial difficulty during the three months ended September 30, 2024, compared to no modifications in the same period of 2023[57]. - Charge-offs for the nine months ended September 30, 2024, totaled $1,436, with significant charge-offs in the commercial segment[64]. - The amortized cost basis of loans modified due to financial difficulty was $301 as of September 30, 2024, with no loans written off in the nine months ended September 30, 2024[59]. - The bank's allowance for credit losses on commercial loans was $2,553 as of September 30, 2024, reflecting a focus on managing credit risk in this segment[64]. - The bank closely monitors the performance of modified loans, with all modified loans remaining current as of September 30, 2024[60]. Deposits and Funding - Total deposits as of September 30, 2024, were $1,479,977,000, an increase from $1,392,045,000 as of December 31, 2023, reflecting a growth of 6.3%[109]. - The Bank's core deposits totaled $1.34 billion, representing 90% of total deposits as of September 30, 2024, an increase from $1.24 billion or 89% of total deposits at December 31, 2023[184]. - Estimated uninsured deposits were $398.3 million, or 26.91% of total deposits, at September 30, 2024, slightly down from $382.1 million, or 27.45% at December 31, 2023[176]. Interest Income and Expense - Net interest income for the three months ended September 30, 2024, was $13,549,000, compared to $13,340,000 for the same period in 2023, reflecting an increase of 1.57%[115]. - The company’s interest expense for the three months ended September 30, 2024, was $6,918,000, compared to $4,966,000 for the same period in 2023, indicating an increase of 39.2%[115]. - Interest income for Q3 2024 was $20.5 million, up from $18.3 million in Q3 2023, primarily due to increased loan volumes and interest rates[131]. - The average yield on loans increased to 5.72% in Q3 2024 from 5.27% in Q3 2023[131]. - Year-to-date net interest income for the nine months ended September 30, 2024, was $40.3 million, a decrease from $41.4 million for the same period in 2023, primarily due to an $8.8 million increase in interest expense[137]. - Interest expense rose to $20.1 million for the nine months ended September 30, 2024, compared to $11.3 million for the same period in 2023, driven by an increase in time deposits and rates on interest-bearing liabilities[140]. Capital and Liquidity - Shareholders' equity increased to $136.3 million, or 8.20% of total assets, at September 30, 2024, up from $121.0 million, or 7.40% of total assets, at December 31, 2023[189]. - The Company's Tier 1 capital ratio was 14.35% at September 30, 2024, compared to 13.94% at December 31, 2023[195]. - The total risk-based capital ratio for the Bank was 15.16% at September 30, 2024, up from 14.85% at December 31, 2023[196]. - The liquidity ratio for the Bank improved to 29.26% at September 30, 2024, compared to 25.39% at December 31, 2023, exceeding the minimum required ratio of 10%[188]. Operating Expenses - Non-interest expense for the three months ended September 30, 2024, was $15.0 million, up from $14.3 million in the same period in 2023, primarily due to increased occupancy and appraisal management fees[151]. Miscellaneous - The Company has not adopted several recent Accounting Standards Updates (ASUs) as of September 30, 2024, which are not expected to have a material impact on its financial statements[28]. - The bank's operating right of use assets were valued at $4.2 million as of September 30, 2024, with operating lease liabilities at $4.3 million[84].

Financial Performance - Net earnings for Q2 2024 were $4.9 million, or $0.93 per share, compared to $4.8 million, or $0.88 per share, in Q2 2023, reflecting a year-over-year increase of 2.08%[4] - Net earnings for the three months ended June 30, 2024, were $4,888 thousand, slightly up from $4,808 thousand in the prior year, reflecting a growth of 1.7%[22] - Basic net earnings per share increased to $0.93 for the three months ended June 30, 2024, compared to $0.88 in the same period last year, a rise of 5.7%[22] Income and Expenses - Net interest income decreased to $13.4 million in Q2 2024 from $13.8 million in Q2 2023, primarily due to a $2.8 million increase in interest expense[5] - Non-interest income increased to $7.5 million in Q2 2024, up from $6.4 million in Q2 2023, driven by a $591,000 increase in appraisal management fee income[8] - Interest income for the three months ended June 30, 2024, was $20,070 thousand, representing a 14.1% increase from $17,599 thousand in the same period last year[23] - Non-interest income totaled $7,521 thousand for the three months ended June 30, 2024, up from $6,403 thousand, marking a growth of 17.5%[23] - Total non-interest expenses increased to $15,131 thousand for the three months ended June 30, 2024, compared to $13,619 thousand in the previous year, an increase of 11.1%[23] Assets and Loans - Total loans reached $1.11 billion as of June 30, 2024, compared to $1.09 billion at December 31, 2023, indicating a growth of 1.83%[6] - Net loans reached $1,100,656 thousand, up from $1,047,935 thousand year-over-year, indicating a growth of 5.0%[21] - Total assets increased to $1,655,398 thousand as of June 30, 2024, compared to $1,611,574 thousand a year earlier, reflecting a growth of 2.7%[21] Deposits - Total deposits increased to $1.48 billion as of June 30, 2024, up from $1.39 billion at December 31, 2023, representing a growth of 6.47%[18] - Total deposits rose to $1,475,956 thousand, a 7.8% increase from $1,369,524 thousand in the previous year[21] - Core deposits, a non-GAAP measure, increased to $1.33 billion, or 90.02% of total deposits, as of June 30, 2024, compared to $1.24 billion, or 89.30%, at December 31, 2023[18] Credit Quality - Non-performing assets were $4.2 million, or 0.25% of total assets, as of June 30, 2024, compared to $3.9 million, or 0.24% of total assets, at December 31, 2023[16] - The allowance for credit losses on loans was $10.0 million, or 0.90% of total loans, as of June 30, 2024, down from $11.0 million, or 1.01%, at December 31, 2023[17] - The provision for credit losses was $(468) thousand for the three months ended June 30, 2024, compared to $375 thousand in the same period last year, indicating a decrease in provisions[22] - Allowance for credit losses on loans rose to $10,016 million in June 2024 from $9,789 million in June 2023[25] - Total non-performing assets increased to $4,156 million in June 2024 from $3,561 million in June 2023[25] - Non-performing assets to total assets ratio was 0.25% in June 2024, up from 0.22% in June 2023[25] - Allowance for credit losses on loans to non-performing assets ratio was 241.00% in June 2024, down from 274.89% in June 2023[25] Shareholder Returns - Cash dividends for the first half of 2024 were $0.54 per share, compared to $0.53 per share for the same period in 2023[6] - Shareholders' equity increased to $124,312 thousand as of June 30, 2024, from $112,370 thousand a year earlier, reflecting a growth of 10.7%[21] Ratios and Margins - The effective tax rate for Q2 2024 was 22.09%, slightly down from 22.20% in Q2 2023[14] - Net interest margin (tax equivalent) decreased to 3.35% in June 2024 from 3.56% in June 2023[25] - Return on average assets improved to 1.19% in June 2024 compared to 1.08% in June 2023[25] - Return on average shareholders' equity increased to 16.46% in June 2024 from 14.69% in June 2023[25] Loan Quality - Risk Grade 1 (excellent quality) loans represented 0.29% of total loans in June 2024, slightly up from 0.27% in June 2023[25] - Risk Grade 3 (good quality) loans accounted for 72.99% of total loans in June 2024, down from 73.82% in June 2023[25] - There were two relationships exceeding $1.0 million in the Watch risk grade totaling $3.0 million as of June 30, 2024[25]