Peoples Bancorp of North Carolina(PEBK) - 2024 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2024, basic earnings per share increased to $0.74 from $0.58 in the same period of 2023, reflecting a growth of 27.6%[38] - Net earnings for Q1 2024 were $3.9 million, or $0.74 per share, compared to $3.2 million, or $0.58 per share, in Q1 2023, reflecting a year-over-year increase[114] - Noninterest income for Q1 2024 was $3.6 million, compared to $1.5 million in Q1 2023, driven by increased appraisal management fee income[114] - Non-interest income for Q1 2024 was $6.0 million, compared to $3.6 million in Q1 2023, largely due to the absence of losses on securities sales[128] - The annualized return on average assets increased to 0.96% in Q1 2024 from 0.81% in the same period last year[115] - The annualized return on average shareholders' equity rose to 13.51% in Q1 2024, compared to 11.78% in Q1 2023[115] Loan and Credit Quality - The total net loans as of March 31, 2024, amounted to $1,095.8 million, up from $1,082.0 million at December 31, 2023, representing an increase of 1.3%[43] - The total real estate loans increased to $1,015.1 million as of March 31, 2024, compared to $998.1 million at December 31, 2023, indicating a growth of 1.7%[43] - The Company’s total loans not secured by real estate amounted to $91.0 million as of March 31, 2024, down from $94.5 million at December 31, 2023[43] - The total allowance for credit losses decreased to $10,847,000 by the end of Q1 2024, down from $11,041,000 at the beginning of the quarter[59] - Charge-offs during the three months ended March 31, 2024, totaled $656,000, while recoveries amounted to $299,000[59] - The allowance for credit losses for single-family residential loans was $3,597,000, reflecting a provision recovery of $57,000 during the quarter[59] - Non-accrual loans as of March 31, 2024, totaled $3,991,000, with $3,567,000 having no allowance[48] - The total real estate loans past due increased from $7,202,000 on December 31, 2023, to $10,140,000 by March 31, 2024[46][47] - The total allowance for credit losses (ACL) was $10.8 million as of March 31, 2024, down from $11.0 million at December 31, 2023, primarily due to a $213,000 decrease in allowance for other construction loans[136] Investment Securities - The unrealized losses in the investment securities portfolio totaled $51.2 million as of March 31, 2024, slightly down from $51.3 million at December 31, 2023[41] - The total fair value of investment securities available for sale decreased to $394.7 million at March 31, 2024, compared to $391.9 million at December 31, 2023[42] - The fair value of U.S. Treasuries increased to $7.1 million as of March 31, 2024, from $9.8 million at December 31, 2023, reflecting a decrease of approximately 27.7%[96][97] - The fair value of mortgage-backed securities decreased to $237.1 million as of March 31, 2024, down from $273.8 million at December 31, 2023, a decline of about 13.4%[96][97] - The total fair value of investment securities available for sale was reported at $352.5 million as of March 31, 2024, compared to $371.5 million at December 31, 2023, indicating a decrease of approximately 5.1%[96][97] Deposits and Funding - Total deposits increased to $1.45 billion as of March 31, 2024, up from $1.39 billion at December 31, 2023, with core deposits rising to $1.30 billion[152] - Estimated uninsured deposits were $390.2 million, or 26.86% of total deposits, at March 31, 2024, compared to $382.1 million, or 27.45% at December 31, 2023[153] - The Company had no loans 90 days past due and still accruing as of March 31, 2024[151] - The liquidity ratio increased to 27.33% at March 31, 2024, up from 25.39% at December 31, 2023, exceeding the minimum required ratio of 10%[167] Capital and Regulatory Compliance - The Company’s Tier 1 capital ratio was 13.84% at March 31, 2024, compared to 13.94% at December 31, 2023[172] - The total risk-based capital ratio for the Bank was 14.72% at March 31, 2024, down from 14.85% at December 31, 2023[173] - The Bank was considered "well capitalized" at March 31, 2024, meeting all regulatory capital requirements[175] Operating Expenses - Operating lease costs increased to $815,000 in March 2024 from $206,000 in March 2023[76] - Non-interest expense increased to $14.5 million in Q1 2024 from $13.7 million in Q1 2023, mainly due to higher salaries and employee benefits[129]