Peoples Bancorp of North Carolina(US:PEBK)2024-11-05 18:38Financial 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].