Peoples Bancorp Stock Gains on Solid Q3 Earnings and Loan Growth

Core Viewpoint - Peoples Bancorp of North Carolina, Inc. (PEBK) experienced a 9.9% increase in share price following its earnings report for Q3 2025, outperforming the S&P 500 Index's 1% gain during the same period [1] Earnings Summary - For Q3 2025, Peoples Bancorp reported net earnings of $3.7 million, or $0.70 per share, a decrease of 6.7% from $3.9 million, or $0.74 per share, in the same quarter of the previous year, primarily due to higher provisions for credit losses and rising non-interest expenses [2] - Year-to-date net earnings for the nine months ended Sept. 30, 2025, were $13.2 million, or $2.49 per share, reflecting a 3.1% increase from $12.8 million, or $2.41 per share, in the same period of 2024 [4] Income and Expenses - Net interest income rose 11.6% to $15.1 million from $13.5 million a year earlier, supported by a wider net interest margin (NIM) of 3.58% compared to 3.35% [3] - Non-interest income remained stable at $7.1 million, with a 17.2% increase in appraisal management fees offset by a 21.1% decline in miscellaneous income [3] - Non-interest expenses increased by 12.7% to $16.9 million from $15 million, driven by higher legal, debit card, and salary costs [3] Loan and Deposit Growth - Total loans increased to $1.18 billion as of Sept. 30, 2025, up from $1.14 billion at year-end 2024, while total deposits rose to $1.55 billion from $1.48 billion during the same period [5] - Core deposits were $1.39 billion, representing 89.65% of total deposits as of Sept. 30, 2025, compared to $1.34 billion or 90.17% at the end of 2024 [5] Asset Quality and Capital - Non-performing assets totaled $5.1 million, accounting for 0.29% of total assets, unchanged from the end of 2024 [7] - The allowance for credit losses on loans was $10.2 million, or 0.86% of total loans, slightly higher than $9.9 million, or 0.88%, at the end of 2024 [7] - Shareholders' equity increased to $149.5 million as of Sept. 30, 2025, from $130.6 million at the end of 2024, driven by a reduction in unrealized losses on securities [7] Management Commentary - The decline in quarterly earnings was attributed to higher provisions for credit losses and increased non-interest expenses, although core banking operations remained strong [8] - Management emphasized that asset quality and capital ratios remained solid, with a focus on prudent loan and deposit growth [9] Legal Developments - A significant legal ruling in September 2025 favored the bank in its dispute with the North Carolina Department of Transportation, resulting in an expected gain of $3.6 million [12]