Peoples Bancorp of North Carolina(US:PEBK)2025-03-12 21:10Financial 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].