Peoples Bancorp of North Carolina(PEBK) - 2025 Q1 - Quarterly Report

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].