Peoples Bancorp of North Carolina(PEBK) - 2024 Q2 - Quarterly Results

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]