Peoples Bancorp of North Carolina(US:PEBK)2026-03-11 19:39Financial Position - As of December 31, 2025, the Company had total assets of $1.70 billion, net loans of $1.20 billion, deposits of $1.51 billion, total securities of $380.0 million, and shareholders' equity of $157.1 million[15]. - As of December 31, 2025, the Bank's Tier 1 leverage capital ratio was 11.13%, and the total risk-based capital ratio was 15.70%[54]. - The Company exceeded its minimum capital requirements with a Tier 1 leverage capital ratio of 11.33% and a total risk-based capital ratio of 15.82% as of December 31, 2025[54]. - As of December 31, 2025, the company had $1.51 billion in deposits, which are critical for funding its lending activities[112]. - The company's two largest deposit relationships amounted to $122.7 million, representing 8.13% of total deposits, indicating reliance on a small number of large depositors[111]. Market Position and Competition - The Bank held 23.54% of the deposits in Catawba County, ranking first among 11 banks, and 15.24% in Lincoln County, ranking third among 10 banks[22]. - The Bank's primary market area is significantly influenced by its proximity to Charlotte, North Carolina, affecting both deposits and loan demand[20]. - The Bank faces strong competition for deposits and loans from other commercial banks, credit unions, and mortgage banking companies[22]. - The company faces substantial competition from various financial institutions, including fintechs, which may have more resources and fewer regulatory constraints[136]. Regulatory Compliance - The Company is subject to extensive regulation under both federal and state law, impacting its operations and compliance requirements[47]. - The Company complies with the Sarbanes-Oxley Act, which enhances corporate governance and accountability measures for public companies[88]. - The Bank is subject to examination by the FDIC and must comply with various state and federal regulations, including those related to consumer credit and fair credit reporting[91]. - The Economic Growth Act modified certain financial reform rules, maintaining most of the regulatory structure established by the Dodd-Frank Act while providing regulatory relief for community banks[53]. - The federal banking regulators require banks to notify them within 36 hours of identifying a significant computer-security incident[82]. Risk Factors - Unfavorable economic conditions could adversely affect the company's operations and financial condition, particularly in the Catawba Valley region of North Carolina, where it is primarily concentrated[98]. - Inflation has risen significantly, impacting customers' ability to repay loans, which may lead to increased loan delinquencies[99]. - The company is subject to credit risk, with potential losses if borrowers are unable to repay loans due to economic conditions or rising interest rates[102]. - A significant portion of the loan portfolio includes commercial real estate and construction loans, which are more susceptible to losses during economic downturns[103]. - The company is exposed to liquidity risk, relying on deposits and cash flows to meet liquidity demands, which could be negatively impacted by market conditions[133]. - The company faces risks related to the soundness of other financial institutions, which could impact its operations and financial condition[131]. - The company faces reputation risk from negative public opinion, which could adversely affect customer retention and lead to legal consequences[142]. Operational Aspects - The Company employed 268 full-time employees and eight part-time employees, equating to 273 full-time equivalent employees as of December 31, 2025[42]. - The Company has established internal operational controls to manage operational risk, but acknowledges that future losses may still occur[124]. - The company relies on accurate information from customers and counterparties for credit decisions, and inaccuracies could lead to unfavorable transactions[125]. - The company relies on third-party vendors for transactional processing, which could impact its ability to account for customer transactions if issues arise[119]. - The company is implementing artificial intelligence tools to enhance efficiency, but acknowledges significant risks associated with AI, including potential errors and compliance issues[120]. Cybersecurity - The Company maintains multiple layers of cybersecurity controls to protect sensitive data and manage risks associated with cyber-attacks[81]. - The company has a cybersecurity risk management program in place, designed to mitigate risks associated with external threats[164]. - Cybersecurity incidents pose a risk to business operations and could lead to reputational damage and increased costs[114]. - The SEC adopted new cybersecurity disclosure rules in July 2023, requiring public companies to disclose cybersecurity risk management processes and material incidents[83]. Corporate Governance - The Company’s corporate governance policies are available on its website, ensuring transparency and compliance with regulatory requirements[95]. - The company has a publicly announced stock repurchase program with a remaining dollar value of $3,000,000 available for repurchase as of the end of the reporting period[184]. - The company has incorporated various amendments to its Articles of Incorporation, with the latest amendment dated February 25, 2022[206]. - The independent registered public accounting firm has reported on the consolidated balance sheets as of December 31, 2025, and 2024[208]. Financial Performance - The cumulative total return for Peoples Bancorp of North Carolina, Inc. was 184.35% as of December 31, 2025, compared to 187.14% for the NASDAQ Composite Index[182]. - The company recognized approximately $776,000 in FDIC insurance expense in 2025, compared to $764,000 in 2024[64]. - Increases in FDIC insurance premiums could adversely affect the company's net income and profitability[113]. - Changes in interest rates can affect the company's profitability by impacting the spread between interest earned on loans and interest paid on deposits[109]. Shareholder Information - As of February 28, 2026, the company had 642 shareholders of record, excluding those held in nominee or street name[179]. - The company's common stock is listed on the NASDAQ Global Market under the symbol "PEBK" with market makers including Raymond James Financial, Inc. and Hovde Group, LLC[177]. - The company may reduce or eliminate dividends on its common stock, which could adversely affect stock market price[161]. - The company's ability to pay dividends is dependent on the receipt of dividends from the Bank, which is subject to legal limitations[178].