Peoples Bancorp of North Carolina(US:PEBK)2025-11-04 20:22Earnings and Financial Performance - For the three months ended September 30, 2025, the basic earnings per share was $0.70, with net earnings of $3,692,000 and a weighted average of 5,309,028 shares outstanding[37]. - For the nine months ended September 30, 2025, the basic earnings per share was $2.49, with net earnings of $13,197,000 and a weighted average of 5,303,953 shares outstanding[38]. - The diluted earnings per share for the three months ended September 30, 2025, was $0.67, with a total of 5,471,622 shares considered[37]. - The diluted earnings per share for the nine months ended September 30, 2025, was $2.41, with a total of 5,469,553 shares considered[39]. - Net earnings for the three months ended September 30, 2025, were $3.7 million, a decrease from $4.0 million in the prior year period[127]. - Net earnings for the nine months ended September 30, 2025, increased to $13.2 million from $12.8 million in the prior year period[128]. Investment Securities - The total fair value of investment securities available for sale as of September 30, 2025, was $376,868,000, with unrealized losses of $38,362,000[41]. - The amortized cost of investment securities available for sale was $414.9 million, with a fair value of $376.9 million as of September 30, 2025[44]. - The Company reported unrealized gains and losses on investment securities as the only component of other comprehensive income[33]. - The Company has not adopted several recent Accounting Standards Updates (ASUs) that may impact financial statements, including ASU 2023-09 and ASU 2024-03, effective December 15, 2024, and 2026 respectively[30][31]. - The Company’s accounting policies have not seen significant changes since December 31, 2024[29]. Loans and Credit Quality - The total net loans increased to $1,173.2 million as of September 30, 2025, compared to $1,128.4 million at December 31, 2024, reflecting a growth of approximately 4.0%[46]. - Real estate loans accounted for $1,105.9 million of total loans as of September 30, 2025, up from $1,048.0 million at December 31, 2024, indicating a growth of about 5.4%[46]. - The company has a diversified loan portfolio, with a significant portion collateralized by real estate, which is subject to market fluctuations[46]. - Non-accrual loans totaled $5.1 million as of September 30, 2025, compared to $4.4 million at December 31, 2024[50][51]. - The total allowance for credit losses, including loan commitments, is $11,382,000 as of September 30, 2025, indicating a comprehensive approach to managing credit risk[66]. - The allowance for credit losses increased from $9,792,000 at the beginning of the three months ended September 30, 2025, to $10,206,000 at the end of the period, reflecting a provision for loan losses of $612,000[66]. - The charge-offs for the three months ended September 30, 2025, amounted to $249,000, while recoveries were $51,000, resulting in a net charge-off of $198,000[66]. - The bank employs a loan grading system to monitor credit quality, which is reviewed monthly by the Bank Board to ensure appropriate reserve levels[62]. Deposits and Capital - Total deposits increased to $1.55 billion as of September 30, 2025, up from $1.48 billion at December 31, 2024, with core deposits at $1.39 billion[175]. - Shareholders' equity rose to $149.5 million, or 8.60% of total assets, compared to $130.6 million, or 7.90% of total assets, at December 31, 2024[189]. - The Company's Tier 1 capital ratio was 14.83% at September 30, 2025, compared to 14.47% at December 31, 2024[194]. - The total risk-based capital ratio was 15.70% at September 30, 2025, up from 15.34% at December 31, 2024[194]. - The liquidity ratio improved to 30.14% at September 30, 2025, compared to 28.16% at December 31, 2024[187]. Interest Income and Expense - Net interest income for the three months ended September 30, 2025, is $15,119,000, compared to $13,549,000 for the same period in 2024, reflecting an increase[116]. - Interest income for the three months ended September 30, 2025, was $21.4 million, compared to $20.5 million for the same period in 2024[132]. - The average yield on loans for the nine months ended September 30, 2025, was 5.76%, compared to 5.65% for the same period in 2024, while the average yield on investment securities available for sale decreased to 3.19% from 3.37%[139]. - Interest expense decreased to $18.4 million for the nine months ended September 30, 2025, from $20.1 million in 2024, primarily due to lower rates on interest-bearing liabilities[140]. - The average rate paid on interest-bearing liabilities was 2.20% for the nine months ended September 30, 2025, down from 2.46% in the prior year[140]. Non-Interest Income and Expense - Non-interest income for the nine months ended September 30, 2025, was $21.3 million, a 2.9% increase from $20.7 million in the same period in 2024[149]. - Non-interest expense for the three months ended September 30, 2025, was $16.9 million, an increase of 12.7% compared to $15.0 million in the same period in 2024[150]. - The increase in non-interest expense for the nine months ended September 30, 2025, was primarily due to a $1.6 million increase in appraisal management fee expense[151]. Legal and Compliance - The company conducted an evaluation of its disclosure controls and procedures, concluding they are effective for timely decision-making regarding material information[198]. - No changes in internal control over financial reporting have occurred that materially affect the company's reporting[198]. - The company is not involved in any material pending legal proceedings, only routine proceedings in the ordinary course of business[199].