-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IjLHD0w79ub2W0hPefi77CGG20q6Gei0bUiL8xEv5q1mrJnjzovhMmxYio/HUlY+ OXT1VU7m+M9Pw4e/1tOeKg== 0001015402-03-002768.txt : 20030717 0001015402-03-002768.hdr.sgml : 20030717 20030717170215 ACCESSION NUMBER: 0001015402-03-002768 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030714 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030717 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLES BANCORP OF NORTH CAROLINA INC CENTRAL INDEX KEY: 0001093672 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 562132396 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27205 FILM NUMBER: 03791700 BUSINESS ADDRESS: STREET 1: 518 WEST C STREET CITY: NEWTON STATE: NC ZIP: 28658-4007 BUSINESS PHONE: 8284645620 MAIL ADDRESS: STREET 1: PO BOX 467 CITY: NEWTON STATE: NC ZIP: 28658-0467 8-K 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): JULY 14, 2003 PEOPLES BANCORP OF NORTH CAROLINA, INC. -------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) NORTH CAROLINA 000-27205 56-2132396 --------------- --------- ---------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File No.) Identification No.) 518 WEST C STREET NEWTON, NORTH CAROLINA 28658 ------------------------ ----- (Address of Principal Executive Offices) (Zip Code) (828) 464-5620 -------------- (Registrant's Telephone Number, Including Area Code) Peoples Bancorp of North Carolina, Inc. INDEX ----- Page ---- Item 7 - Financial Statements and Exhibits 3 Item 9 - Regulation FD Disclosure (disclosure pursuant to Item 12, Results of Operations and Financial Condition) 3 Signatures 4 Exhibit 99(a) Press Release dated July 14, 2003 5 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits (99)(a) Press Release, dated July 14, 2003 ITEM 9. REGULATION FD DISCLOSURE (disclosing information pursuant to Item 12, Results of Operations and Financial Condition) (a) On July 14, 2003, Peoples Bancorp of North Carolina, Inc. issued a press release announcing second quarter earnings. A copy of the press release is attached hereto as Exhibit (99)(a) and is incorporated by reference herein. DISCLOSURE ABOUT FORWARD-LOOKING STATEMENTS This Form 8-K contains forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, changes in interest rate environment, management's business strategy, national, regional, and local market conditions and legislative and regulatory conditions. Readers should not place undue reliance on forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Readers should also carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PEOPLES BANCORP OF NORTH CAROLINA, INC. Date: July 17, 2003 By: /s/ A. Joseph Lampron ---------------------------------------------- A. Joseph Lampron Executive Vice President and Chief Financial Officer 4 EX-99.1 3 doc2.txt Exhibit (99)(a) NEWS RELEASE JULY 14, 2003 CONTACT: TONY W. WOLFE PRESIDENT AND CHIEF EXECUTIVE OFFICER A. JOSEPH LAMPRON EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 828-464-5620, FAX 828-465-6780 FOR IMMEDIATE RELEASE - ----------------------- PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS --------------------------------------------------------- Peoples Bancorp of North Carolina, Inc., the parent company of Peoples Bank, reported net income of $91,200, or $.03 basic and diluted net income per share, for the three months ended June 30, 2003 as compared to $646,299, or $.21 basic net income per share and $.20 diluted net income per share, for the same period one year ago. Tony W. Wolfe, President and Chief Executive Officer, attributed the decrease in second quarter earnings to an increase in the provision for loan losses and a decrease in non-interest income resulting from write-downs on certain repossessed assets. The provision for loan losses for the three months ended June 30, 2003 was $2,276,900 as compared to $1,266,100 for same period one year ago. The increase in the provision for loan losses reflects an increase in classified loans and non-performing assets, which is the result of adverse business conditions in the Bank's market area and the cumulative effect on certain businesses from terrorist activities in 2001 and the Washington, DC sniper attacks in 2002. Non-interest income for the three months ended June 30, 2003 decreased 25% to $1,056,012 as compared to $1,405,778 for the same period last year, due to write-downs of aircraft repossessed in 2002. Year-to-date net income as of June 30, 2003 was $1,509,288, or $.48 basic and diluted net income per share. Net income from recurring operations for the six months ended June 30, 2003 was $1,215,428, or $.39 basic and diluted net income per share, representing a 21% decrease from net income from recurring operations of $1,532,175, or $.48 basic and diluted net income per share for the six months ended June 30, 2002. Non-recurring income in 2003 amounted to $293,860, net of income tax expense, associated with the sale of the Bank's $3.7 million credit card portfolio during first quarter. The Company did not have any non-recurring income in the six months ended June 30, 2002. The decrease in year-to-date recurring earnings is attributable to an increase in the provision for loan losses and a decrease in non-interest income resulting from write-downs on certain repossessed assets. The year-to-date provision for loan losses increased to $3,069,900 as of June 30, 2003, as compared to $1,766,100 for the six months ended June 30, 2002. Excluding non-recurring income associated with the sale of the Bank's credit card portfolio, non-interest income for the six months ended June 30, 2003 decreased 13% to $2,561,611, as compared to $2,929,722 for the same period last year. This decrease is primarily attributable to write-downs of aircraft repossessed in 2002. Net interest income increased 8% to $5,434,979 for the three months ended June 30, 2003 compared to $5,012,314 for the same period one year ago. Year-to-date net interest income increased 15% to $10,891,142 for the PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS- PAGE TWO - ------------------------------------------------------------------- six months ended June 30, 2003 compared to $9,493,956 for the same period one year ago. This increase is primarily attributable to a decrease in the cost of funds, which reflects a general decline in market interest rates paid on deposits. Non-interest expense for the three months ended June 30, 2003, was $4,174,991 as compared to $4,193,293 for the same period last year. Year-to-date non-interest expense increased 3% to $8,621,924 for the six months ended June 30, 2003, as compared to $8,408,003 for the same period last year. Net earnings for the year ending December 31, 2003, including non-recurring items, are expected to be in the range of $3.2 million to $3.6 million, resulting in basic and diluted earnings per share in the range of $1.03 to $1.16, approximately 31% to 23% below previous expectations. Total assets as of June 30, 2003 amounted to $665,046,347, an increase of 6% compared to total assets of $626,488,136 at June 30, 2002. This increase is primarily attributable to an increase in loans, which was partially offset by a decrease in available-for-sale securities. Loans increased 6% to $535,185,738 as of June 30, 2003 compared to $505,943,612 as of June 30, 2002. Non-performing assets totaled $11,657,029 at June 30, 2003 or 1.75% of total assets, compared to $8,943,496 at June 30, 2002 or 1.43% of total assets. Non-performing assets increased by $2.1 million from March 31, 2003 as one customer with loans totaling $2.5 million unexpectedly ceased operations. There is a specific reserve of $1.4 million associated with that customer. The allowance for loan losses at June 30, 2003 amounted to $9,033,342 or 1.69% of total loans compared to $7,117,151 or 1.41% of total loans at June 30, 2002. Deposits amounted to $539,303,799 as of June 30, 2003, representing an increase of 7% over deposits of $504,955,835 at June 30, 2002. Shareholders' equity increased to $50,625,951, or 7.61% of total assets, at June 30, 2003 as compared to $46,100,712, or 7.36% of total assets, at June 30, 2002. Peoples Bank operates eleven offices throughout Catawba County, North Carolina, one office in Alexander County, North Carolina and three offices in Lincoln County, North Carolina. The Company's common stock is publicly traded over the counter and is quoted on the Nasdaq National Market under the symbol "PEBK." Scott and Stringfellow, Inc., Ryan, Beck & Co., Sterne Agee & Leach, Inc. and Trident Securities, Inc. are market makers for the Company's shares. (TABLES FOLLOW) STATEMENTS MADE IN THIS PRESS RELEASE, OTHER THAN THOSE CONCERNING HISTORICAL INFORMATION, SHOULD BE CONSIDERED FORWARD-LOOKING STATEMENTS PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE SECURITIES EXCHANGE ACT OF 1934 AND THE PRIVATE SECURITIES LITIGATION ACT OF 1995. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES AND ARE BASED ON THE BELIEFS AND ASSUMPTIONS OF MANAGEMENT AND ON THE INFORMATION AVAILABLE TO MANAGEMENT AT THE TIME THAT THIS RELEASE WAS PREPARED. THESE STATEMENTS CAN BE IDENTIFIED BY THE USE OF WORDS LIKE "EXPECT," "ANTICIPATE," "ESTIMATE," AND "BELIEVE," VARIATIONS OF THESE WORDS AND OTHER SIMILAR EXPRESSIONS. READERS SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS AS A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE, BUT ARE NOT LIMITED TO, (1) COMPETITION IN THE MARKETS SERVED BY PEOPLES BANK, (2) CHANGES IN THE INTEREST RATE ENVIRONMENT, (3) GENERAL NATIONAL, REGIONAL OR LOCAL ECONOMIC CONDITIONS MAY BE LESS FAVORABLE THAN EXPECTED, RESULTING IN, AMONG OTHER THINGS, A DETERIORATION IN CREDIT QUALITY AND THE POSSIBLE IMPAIRMENT OF COLLECTIBILITY OF LOANS, (4) LEGISLATIVE OR REGULATORY CHANGES, INCLUDING CHANGES IN ACCOUNTING STANDARDS, (5) SIGNIFICANT CHANGES IN THE FEDERAL AND STATE LEGAL AND REGULATORY ENVIRONMENT AND TAX LAWS, (6) THE IMPACT OF CHANGES IN MONETARY AND FISCAL POLICIES, LAWS, RULES AND REGULATIONS AND (7) OTHER RISKS AND FACTORS IDENTIFIED IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING BUT NOT LIMITED TO THOSE DESCRIBED IN PEOPLES BANCORP OF NORTH CAROLINA, INC.'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2002, UNDER "GENERAL DESCRIPTION OF BUSINESS."
PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS - PAGE THREE - ---------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS June 30, 2003, December 31, 2002 and June 30, 2002 ============================================================================================================= JUNE 30, 2003 December 31, 2002 June 30, 2002 --------------- ------------------- --------------- (Unaudited) (Unaudited) ASSETS: Cash and due from banks $ 21,151,593 $ 13,803,665 $ 14,053,853 Federal funds sold 9,389,000 1,774,000 4,447,000 --------------- ------------------- --------------- Cash and cash equivalents 30,540,593 15,577,665 18,500,853 --------------- ------------------- --------------- Investment securities available for sale 73,457,013 71,735,705 76,269,797 Other investments 4,021,973 4,345,573 4,902,773 --------------- ------------------- --------------- Total securities 77,478,986 76,081,278 81,172,570 --------------- ------------------- --------------- Loans 535,185,738 526,369,746 505,943,612 Mortgage loans held for sale 6,026,760 5,064,635 2,089,370 Less: Allowance for loan losses (9,033,342) (7,247,906) (7,117,151) --------------- ------------------- --------------- Net loans 532,179,156 524,186,475 500,915,831 --------------- ------------------- --------------- Premises and equipment, net 12,870,461 15,620,977 15,144,879 Accrued interest receivable and other assets 11,977,151 13,275,143 10,754,003 --------------- ------------------- --------------- Total assets $ 665,046,347 $ 644,741,538 $ 626,488,136 =============== =================== =============== LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits: Non-interest bearing demand $ 76,511,443 $ 67,398,458 $ 66,190,262 NOW, MMDA & Savings 151,967,089 156,554,189 159,679,710 Time, $100,000 or more 177,140,673 160,836,596 159,160,964 Other time 133,684,594 130,949,712 119,924,899 --------------- ------------------- --------------- Total deposits 539,303,799 515,738,955 504,955,835 Demand notes payable to U.S. Treasury 1,600,000 1,600,000 1,488,467 FHLB borrowings 58,000,000 63,071,429 58,142,857 Trust preferred securities 14,000,000 14,000,000 14,000,000 Accrued interest payable and other liabilities 1,516,597 1,726,421 1,800,265 --------------- ------------------- --------------- Total liabilities 614,420,396 596,136,805 580,387,424 --------------- ------------------- --------------- Shareholders' Equity: Preferred stock, no par value; authorized 5,000,000 shares; no shares issued and outstanding - - - Common stock, no par value; authorized 20,000,000 shares; issued and outstanding 3,133,547 shares in 2003 and 3,145,547 shares in 2002 35,097,773 35,097,773 35,265,773 Retained earnings 12,976,941 12,094,363 10,818,692 Accumulated other comprehensive income 2,551,237 1,412,597 16,247 --------------- ------------------- --------------- Total shareholders' equity 50,625,951 48,604,733 46,100,712 --------------- ------------------- --------------- Total liabilities and shareholders' equity $ 665,046,347 $ 644,741,538 $ 626,488,136 =============== =================== =============== MEMORANDUM: Letters of Credit $ 1,976,571 $ 2,061,103 $ 2,170,369 =============== =================== ===============
PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS - PAGE FOUR - --------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME For the three and six months ended June 30, 2003 and 2002 ===================================================================================================== THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2003 2002 2003 2002 -------------------------- ------------------------- (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) INTEREST INCOME: Interest and fees on loans $ 7,823,938 $ 7,939,039 $ 15,607,361 $15,754,574 Interest on federal funds sold 27,168 13,100 44,097 23,848 Interest on investment securities: U.S. Government agencies 548,989 908,465 1,184,115 1,873,572 States and political subdivisions 141,690 153,602 291,351 329,634 Other 108,830 125,266 217,797 246,998 ------------ ------------ ------------ ----------- Total interest income 8,650,615 9,139,472 17,344,721 18,228,626 ------------ ------------ ------------ ----------- INTEREST EXPENSE: NOW, MMDA & Savings deposits 328,237 538,993 634,997 1,049,346 Time deposits 2,077,721 2,749,898 4,180,477 5,968,764 FHLB borrowings 641,982 652,023 1,301,923 1,336,932 Trust preferred securities 166,250 183,750 332,500 367,500 Other 1,446 2,494 3,682 12,128 ------------ ------------ ------------ ----------- Total interest expense 3,215,636 4,127,158 6,453,579 8,734,670 ------------ ------------ ------------ ----------- NET INTEREST INCOME 5,434,979 5,012,314 10,891,142 9,493,956 PROVISION FOR LOAN LOSSES 2,276,900 1,266,100 3,069,900 1,766,100 ------------ ------------ ------------ ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,158,079 3,746,214 7,821,242 7,727,856 ------------ ------------ ------------ ----------- OTHER INCOME: Service charges 818,928 748,987 1,591,079 1,409,483 Other service charges and fees 145,442 114,190 304,880 277,059 Gain (loss) on sale of securities - - - - Mortgage banking income 213,751 169,913 404,108 399,867 Insurance and brokerage commission 102,230 125,637 199,192 245,265 Miscellaneous (224,339) 247,051 541,111 598,048 ------------ ------------ ------------ ----------- Total other income 1,056,012 1,405,778 3,040,370 2,929,722 ------------ ------------ ------------ ----------- OTHER EXPENSES: Salaries and employee benefits 2,365,716 2,416,871 4,929,510 4,853,873 Occupancy 815,277 753,730 1,650,166 1,513,073 Other 993,998 1,022,692 2,042,248 2,041,057 ------------ ------------ ------------ ----------- Total other expenses 4,174,991 4,193,293 8,621,924 8,408,003 ------------ ------------ ------------ ----------- INCOME BEFORE INCOME TAXES 39,100 958,699 2,239,688 2,249,575 INCOME TAXES (52,100) 312,400 730,400 717,400 ------------ ------------ ------------ ----------- NET INCOME $ 91,200 $ 646,299 $ 1,509,288 $ 1,532,175 ============ ============ ============ =========== PER SHARE AMOUNTS Basic net income $ 0.03 $ 0.21 $ 0.48 $ 0.48 Diluted net income $ 0.03 $ 0.20 $ 0.48 $ 0.48 Cash dividends $ 0.10 $ 0.10 $ 0.20 $ 0.20 Book value $ 16.16 $ 14.66 $ 16.16 $ 14.66
PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS - PAGE FIVE - --------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For the three and six months ended June 30, 2003 and 2002 ==================================================================================================================== THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2003 2002 2003 2002 ---------------------------- ---------------------------- (UNAUDITED) (Unaudited) (UNAUDITED) (Unaudited) SELECTED AVERAGE BALANCES: Available for Sale Securities $ 68,415,497 $ 78,932,885 $ 68,749,135 $ 81,208,379 Loans 537,645,145 503,687,135 535,413,573 500,858,670 Earning Assets 622,429,981 590,226,462 617,759,390 589,790,689 Assets 658,083,592 621,184,213 654,151,843 620,763,454 Deposits 530,003,252 499,551,954 519,362,374 494,528,924 Shareholders' Equity 50,097,160 45,566,675 50,073,261 46,194,563 SELECTED KEY DATA: Net Interest Margin (tax equivalent) 3.55% 3.46% 3.60% 3.30% Return on Average Assets 0.06% 0.42% 0.47% 0.50% Return on Average Shareholders' Equity 0.73% 5.69% 6.08% 6.69% Shareholders' Equity to Total Assets (Period End) 7.61% 7.36% 7.61% 7.36% ALLOWANCE FOR LOAN LOSSES: Balance, beginning of period $ 7,606,124 $ 6,481,894 $ 7,247,906 $ 6,090,570 Provision for loan losses 2,276,900 1,266,100 3,069,900 1,766,100 Charge-offs (895,227) (664,044) (1,378,922) (818,000) Recoveries 45,545 33,201 94,458 78,481 ---------------------------- ---------------------------- Balance, end of period $ 9,033,342 $ 7,117,151 $ 9,033,342 $ 7,117,151 ============================ ============================ ASSET QUALITY: Nonaccrual Loans $ 9,148,382 $ 8,606,009 90 Days Past Due and still accruing 81,340 55,456 Other Real Estate Owned 1,715,936 282,031 Repossessed Assets 711,371 - ---------------------------- Total Nonperforming Assets $ 11,657,029 $ 8,943,496 ============================ Nonperforming Assets to Total Assets 1.75% 1.43% Allowance for Loan Losses to Nonperforming Assets 77.49% 79.58% Allowance for Loan Losses to Total Loans 1.69% 1.41%
LOAN RISK GRADE ANALYSIS: PERCENTAGE OF LOANS GENERAL RESERVE BY RISK GRADE PERCENTAGE ------------------------------------- 2003 2002 2003 2002 ------ ------ ------- ------- Risk 1 (Excellent Quality) 9.60% 8.55% 0.15% 0.15% Risk 2 (High Quality) 30.04% 39.45% 0.50% 0.50% Risk 3 (Good Quality) 49.60% 43.79% 1.00% 1.00% Risk 4 (Management Attention) 4.09% 3.81% 2.50% 2.50% Risk 5 (Watch) 3.35% 1.90% 7.00% 7.00% Risk 6 (Substandard) 1.49% 0.78% 12.00% 12.00% Risk 7 (Low Substandard) 0.12% 0.02% 25.00% 25.00% Risk 8 (Doubtful) 0.00% 0.00% 50.00% 50.00% Risk 9 (Loss) 0.00% 0.00% 100.00% 100.00%
At June 30, 2003 there were four relationships exceeding $1 million each (which totaled $11.7 million) in the Watch risk grade and two relationships exceeding $1 million each (which totaled $6.2 million) in the Substandard risk grade. Balances of individual relationships exceeding $1 million in these risk grades ranged from $2.3 million to $3.9 million. If current operating conditions for these customers remain stable, it is not expected that any of the relationships with balances exceeding $1 million will become non-performing assets within the next three to six months. If unforeseen events were to occur, it is possible that the viability of one or more of these customers could require the reclassification of their loans to non-accrual. (END) -----END PRIVACY-ENHANCED MESSAGE-----