UNITED STATES SECURITIES AND EXCHANGE COMMISSION
|
|||
Washington, D.C. 20549
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FORM 10-Q
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[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended: March 31, 2011
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OR
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from __________ to __________
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PEOPLES BANCORP OF NORTH CAROLINA, INC.
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(Exact name of registrant as specified in its charter)
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North Carolina
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(State or other jurisdiction of incorporation or organization)
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000-27205
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56-2132396
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||
(Commission File No.)
|
(IRS Employer Identification No.)
|
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518 West C Street, Newton, North Carolina
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28658
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||
(Address of principal executive offices)
|
(Zip Code)
|
||
(828) 464-5620
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(Registrant’s telephone number, including area code)
|
|||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes
|
X | No |
|
Yes
|
No |
X
|
Large Accelerate Filer
|
Accelerated Filer
|
Non-Accelerated Filer
|
Smaller Reporting Company
|
X
|
Yes
|
No |
X
|
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
5,542,703 shares of common stock, outstanding at April 30, 2011.
|
INDEX | |||
PART I.
|
FINANCIAL INFORMATION
|
PAGE(S)
|
|
Item 1.
|
Financial Statements
|
||
Consolidated Balance Sheets at March 31, 2011 (Unaudited) and
|
|||
December 31, 2010 (Audited)
|
3
|
||
Consolidated Statements of Earnings for the three months ended March
|
|||
31, 2011 and 2010 (Unaudited)
|
4
|
||
Consolidated Statements of Comprehensive Income for the three months
|
|||
ended March 31, 2011 and 2010 (Unaudited)
|
5
|
||
Consolidated Statements of Cash Flows for the three months ended March
|
|||
31, 2011 and 2010 (Unaudited)
|
6-7
|
||
Notes to Consolidated Financial Statements (Unaudited)
|
8-20
|
||
Item 2.
|
Management's Discussion and Analysis of Financial Condition
|
||
and Results of Operations
|
21-32
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||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
33
|
|
Item 4T.
|
Controls and Procedures
|
34
|
|
PART II.
|
OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
35
|
|
Item 1A.
|
Risk Factors
|
35
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
35
|
|
Item 3.
|
Defaults upon Senior Securities
|
35
|
|
Item 5.
|
Other Information
|
35
|
|
Item 6.
|
Exhibits
|
35-38
|
|
Signatures
|
39
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||
Certifications
|
40-42
|
PART I. | FINANCIAL INFORMATION | |
Item 1. | Financial Statements |
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|||||
Consolidated Balance Sheets
|
|||||
(Dollars in thousands)
|
|||||
March 31,
|
December 31,
|
||||
Assets
|
2011
|
2010
|
|||
(Unaudited)
|
(Audited) | ||||
Cash and due from banks, including reserve requirements
|
$ | 44,918 | 22,521 | ||
Interest bearing deposits
|
1,335 | 1,456 | |||
Cash and cash equivalents
|
46,253 | 23,977 | |||
Certificates of deposit
|
735 | 735 | |||
Investment securities available for sale
|
271,570 | 272,449 | |||
Other investments
|
5,976 | 5,761 | |||
Total securities
|
277,546 | 278,210 | |||
Mortgage loans held for sale
|
2,415 | 3,814 | |||
Loans
|
711,166 | 726,160 | |||
Less allowance for loan losses
|
(15,410 | ) | (15,493 | ) | |
Net loans
|
695,756 | 710,667 | |||
Premises and equipment, net
|
17,155 | 17,334 | |||
Cash surrender value of life insurance
|
7,599 | 7,539 | |||
Accrued interest receivable and other assets
|
24,587 | 25,376 | |||
Total assets
|
$ | 1,072,046 | 1,067,652 | ||
Liabilities and Shareholders' Equity
|
|||||
Deposits:
|
|||||
Non-interest bearing demand
|
$ | 120,550 | 114,792 | ||
NOW, MMDA & savings
|
349,077 | 332,511 | |||
Time, $100,000 or more
|
224,485 | 241,366 | |||
Other time
|
144,868 | 150,043 | |||
Total deposits
|
838,980 | 838,712 | |||
Demand notes payable to U.S. Treasury
|
843 | 1,600 | |||
Securities sold under agreement to repurchase
|
38,446 | 34,094 | |||
FHLB borrowings
|
70,000 | 70,000 | |||
Junior subordinated debentures
|
20,619 | 20,619 | |||
Accrued interest payable and other liabilities
|
5,957 | 5,769 | |||
Total liabilities
|
974,845 | 970,794 | |||
Shareholders' equity:
|
|||||
Series A preferred stock, $1,000 stated value; authorized
|
|||||
5,000,000 shares; issued and outstanding
|
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25,054 shares in 2010 and 2009
|
24,652 | 24,617 | |||
Common stock, no par value; authorized
|
|||||
20,000,000 shares; issued and outstanding
|
|||||
5,542,703 shares in 2011 and 5,541,413 shares in 2010
|
48,289 | 48,281 | |||
Retained earnings
|
24,475 | 23,573 | |||
Accumulated other comprehensive (loss) income
|
(215 | ) | 387 | ||
Total shareholders' equity
|
97,201 | 96,858 | |||
Total liabilities and shareholders' equity
|
$ | 1,072,046 | 1,067,652 | ||
See accompanying notes to consolidated financial statements.
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||
Consolidated Statements of Earnings
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||||
Three months ended March 31, 2011 and 2010
|
||||
(Dollars in thousands, except per share amounts)
|
||||
2011
|
2010
|
|||
(Unaudited)
|
(Unaudited)
|
|||
Interest income:
|
||||
Interest and fees on loans
|
$ | 9,614 | 10,091 | |
Interest on investment securities:
|
||||
U.S. Government sponsored enterprises
|
1,082 | 1,405 | ||
States and political subdivisions
|
805 | 402 | ||
Other
|
57 | 32 | ||
Total interest income
|
11,558 | 11,930 | ||
Interest expense:
|
||||
NOW, MMDA & savings deposits
|
717 | 866 | ||
Time deposits
|
1,404 | 1,876 | ||
FHLB borrowings
|
744 | 889 | ||
Junior subordinated debentures
|
100 | 97 | ||
Other
|
79 | 97 | ||
Total interest expense
|
3,044 | 3,825 | ||
Net interest income
|
8,514 | 8,105 | ||
Provision for loans losses
|
2,950 | 2,382 | ||
Net interest income after provision for loan losses
|
5,564 | 5,723 | ||
Non-interest income:
|
||||
Service charges
|
1,255 | 1,319 | ||
Other service charges and fees
|
582 | 602 | ||
Gain sale of securities
|
1,075 | 22 | ||
Mortgage banking income
|
187 | 156 | ||
Insurance and brokerage commissions
|
108 | 98 | ||
Miscellaneous
|
395 | 413 | ||
Total non-interest income
|
3,602 | 2,610 | ||
Non-interest expense:
|
||||
Salaries and employee benefits
|
3,667 | 3,520 | ||
Occupancy
|
1,365 | 1,351 | ||
Other
|
2,368 | 2,318 | ||
Total non-interest expense
|
7,400 | 7,189 | ||
Earnings before income taxes
|
1,766 | 1,144 | ||
Income taxes
|
405 | 269 | ||
Net earnings
|
1,361 | 875 | ||
Dividends and accretion on preferred stock
|
348 | 348 | ||
Net earnings available to common shareholders
|
$ | 1,013 | 527 | |
Basic net earnings per common share
|
$ | 0.18 | 0.10 | |
Diluted net earnings per common share
|
$ | 0.18 | 0.09 | |
Cash dividends declared per common share
|
$ | 0.02 | 0.02 | |
See accompanying notes to consolidated financial statements.
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||||
Consolidated Statements of Comprehensive Income
|
||||||
Three months ended March 31, 2011 and 2011
|
||||||
(Dollars in thousands)
|
||||||
2011
|
2010
|
|||||
(Unaudited)
|
(Unaudited)
|
|||||
Net earnings
|
$ | 1,361 | 875 | |||
Other comprehensive (loss) income:
|
||||||
Unrealized holding gains on securities
|
||||||
available for sale
|
473 | 924 | ||||
Reclassification adjustment for gains on
|
||||||
securities available for sale included in net earnings
|
(1,075 | ) | (22 | ) | ||
Unrealized holding losses on derivative
|
||||||
financial instruments qualifying as cash flow
|
||||||
hedges
|
(384 | ) | (148 | ) | ||
Total other comprehensive (loss) income,
|
||||||
before income taxes
|
(986 | ) | 754 | |||
Income tax (benefit) expense related to other
|
||||||
comprehensive income:
|
||||||
Unrealized holding gains on securities
|
||||||
available for sale
|
185 | 360 | ||||
Reclassification adjustment for gains on
|
||||||
securities available for sale included in net earnings
|
(419 | ) | (9 | ) | ||
Unrealized holding losses on derivative
|
||||||
financial instruments qualifying as cash flow
|
||||||
hedges
|
(150 | ) | (58 | ) | ||
Total income tax (benefit) expense related to
|
||||||
other comprehensive income
|
(384 | ) | 293 | |||
Total other comprehensive (loss) income,
|
||||||
net of tax
|
(602 | ) | 461 | |||
Total comprehensive income
|
$ | 759 | 1,336 | |||
See accompanying notes to consolidated financial statements.
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||||
Consolidated Statements of Cash Flows
|
||||||
Three months ended March 31, 2011 and 2010
|
||||||
(Dollars in thousands)
|
||||||
2011
|
2010
|
|||||
(unaudited) | (unaudited) | |||||
Cash flows from operating activities:
|
||||||
Net earnings
|
$ | 1,361 | 875 | |||
Adjustments to reconcile net earnings to
|
||||||
net cash provided by operating activities:
|
||||||
Depreciation, amortization and accretion
|
1,537 | 992 | ||||
Provision for loan losses
|
2,950 | 2,382 | ||||
Gain on sale of investment securities
|
(1,075 | ) | (22 | ) | ||
(Gain)/loss on sale of other real estate and repossessions
|
97 | (133 | ) | |||
Write-down of other real estate and repossessions
|
250 | 336 | ||||
Restricted stock expense
|
7 | 8 | ||||
Change in:
|
||||||
Mortgage loans held for sale
|
1,399 | 841 | ||||
Cash surrender value of life insurance
|
(60 | ) | (64 | ) | ||
Other assets
|
474 | (299 | ) | |||
Other liabilities
|
181 | 932 | ||||
Net cash provided by operating activities
|
7,121 | 5,848 | ||||
Cash flows from investing activities:
|
||||||
Net change in certificates of deposit
|
- | 1,209 | ||||
Purchases of investment securities available for sale
|
(39,988 | ) | (34,963 | ) | ||
Proceeds from calls, maturities and paydowns of investment securities
|
||||||
available for sale
|
9,881 | 11,870 | ||||
Proceeds from sale of investment securities avialiable for sale
|
30,440 | |||||
Purchases of other investments
|
(215 | ) | - | |||
Net change in loans
|
9,457 | 8,471 | ||||
Purchases of premises and equipment
|
(340 | ) | (86 | ) | ||
Proceeds from sale of other real estate and repossessions
|
2,472 | 1,471 | ||||
Net cash provided (used) by investing activities
|
11,707 | (12,028 | ) | |||
Cash flows from financing activities:
|
||||||
Net change in deposits
|
268 | 28,530 | ||||
Net change in demand notes payable to U.S. Treasury
|
(757 | ) | 181 | |||
Net change in securities sold under agreement to repurchase
|
4,352 | 1,595 | ||||
Proceeds from FHLB borrowings
|
5,000 | - | ||||
Repayments of FHLB borrowings
|
(5,000 | ) | (5,000 | ) | ||
Restricted stock Payout
|
9 | - | ||||
Cash dividends paid on Series A preferred stock
|
(313 | ) | (313 | ) | ||
Cash dividends paid on common stock
|
(111 | ) | (111 | ) | ||
Net cash provided by financing activities
|
3,448 | 24,882 | ||||
Net change in cash and cash equivalent
|
22,276 | 18,702 | ||||
Cash and cash equivalents at beginning of period
|
23,977 | 31,340 | ||||
Cash and cash equivalents at end of period
|
$ | 46,253 | 50,042 |
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|||||
Consolidated Statements of Cash Flows, continued
|
|||||
Three months ended March 31, 2011 and 2010
|
|||||
(Dollars in thousands)
|
|||||
2011
|
2010
|
||||
(unaudited) | (unaudited) | ||||
Supplemental disclosures of cash flow information:
|
|||||
Cash paid during the year for:
|
|||||
Interest
|
$ | 3,076 | 3,842 | ||
Noncash investing and financing activities:
|
|||||
Change in unrealized gain on investment securities
|
|||||
available for sale, net
|
$ | 368 | (551 | ) | |
Change in unrealized gain on derivative financial
|
|||||
instruments, net
|
$ | 234 | 90 | ||
Transfer of loans to other real estate and repossessions
|
$ | 2,991 | 2,076 | ||
Financed portion of sale of other real estate
|
$ | 487 | 932 | ||
Accretion of Series A preferred stock
|
$ | 35 | 35 | ||
See accompanying notes to consolidated financial statements.
|
|||||
(1)
|
Summary of Significant Accounting Policies
|
(2)
|
Investment Securities
|
(Dollars in thousands)
|
||||||||
March 31, 2011
|
||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized Losses
|
Estimated Fair Value
|
|||||
Mortgage-backed securities
|
$ | 131,679 | 840 | 560 | 131,959 | |||
U.S. Government
|
||||||||
sponsored enterprises
|
49,119 | 138 | 703 | 48,554 | ||||
State and political subdivisions
|
89,134 | 929 | 1,509 | 88,554 | ||||
Trust preferred securities
|
1,250 | - | - | 1,250 | ||||
Equity securities
|
1,003 | 338 | 88 | 1,253 | ||||
Total
|
$ | 272,185 | 2,245 | 2,860 | 271,570 |
(Dollars in thousands) | ||||||||
December 31, 2010
|
||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized Losses
|
Estimated Fair Value
|
|||||
Mortgage-backed securities
|
$ | 137,811 | 2,119 | 569 | 139,361 | |||
U.S. Government
|
||||||||
sponsored enterprises
|
42,933 | 393 | 686 | 42,640 | ||||
State and political subdivisions
|
89,486 | 793 | 2,450 | 87,829 | ||||
Trust preferred securities
|
1,250 | - | - | 1,250 | ||||
Equity securities
|
982 | 387 | - | 1,369 | ||||
Total
|
$ | 272,462 | 3,692 | 3,705 | 272,449 |
(Dollars in thousands)
|
||||||||||||
March 31, 2011
|
||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized Losses
|
|||||||
Mortgage-backed securities
|
$ | 55,276 | 560 | - | - | 55,276 | 560 | |||||
U.S. Government
|
||||||||||||
sponsored enterprises
|
30,067 | 703 | - | - | 30,067 | 703 | ||||||
State and political subdivisions
|
45,699 | 1,509 | - | - | 45,699 | 1,509 | ||||||
Equity securities
|
320 | 88 | - | - | 320 | 88 | ||||||
Total
|
$ | 131,362 | 2,860 | - | - | 131,362 | 2,860 | |||||
December 31, 2010
|
||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized Losses
|
|||||||
Mortgage-backed securities
|
$ | 59,471 | 569 | - | - | 59,471 | 569 | |||||
U.S. Government
|
||||||||||||
sponsored enterprises
|
24,123 | 686 | - | - | 24,123 | 686 | ||||||
State and political subdivisions
|
56,374 | 2,450 | - | - | 56,374 | 2,450 | ||||||
Total
|
$ | 139,968 | 3,705 | - | - | 139,968 | 3,705 |
(Dollars in thousands)
|
||||
Amortized
Cost
|
Estimated Fair Value
|
|||
Due within one year
|
$ | 3,957 | 3,979 | |
Due from one to five years
|
50,006 | 49,901 | ||
Due from five to ten years
|
67,417 | 66,525 | ||
Due after ten years
|
18,123 | 17,953 | ||
Mortgage-backed securities
|
131,679 | 131,959 | ||
Equity securities
|
1,003 | 1,253 | ||
Total
|
$ | 272,185 | 271,570 |
(3)
|
Loans
|
(Dollars in thousands)
|
||||
March 31, 2011
|
December 31, 2010
|
|||
Real Estate Loans
|
||||
Construction and land development
|
$ | 114,983 | 124,048 | |
Single-family residential
|
281,045 | 287,307 | ||
Commercial
|
212,680 | 213,487 | ||
Multifamily and farmland
|
6,361 | 6,455 | ||
Total real estate loans
|
615,069 | 631,298 | ||
Commercial loans (not secured by real estate)
|
58,517 | 60,994 | ||
Consumer loans (not secured by real estate)
|
10,709 | 11,500 | ||
All other loans (not secured by real estate)
|
26,871 | 22,368 | ||
Total loans
|
711,166 | 726,160 | ||
Less allowance for loan losses
|
15,410 | 15,493 | ||
Total net loans
|
$ | 695,756 | 710,667 |
March 31, 2011 | ||||||||||||
(Dollars in thousands)
|
||||||||||||
Loans 30-89
Days Past
Due
|
Loans 90 or More Days
Past Due
|
Total
Past Due
Loans
|
Total
Current
Loans
|
Total
Loans
|
Accruing
Loans 90 or More Days
Past Due
|
|||||||
Real Estate Loans
|
||||||||||||
Construction and land development
|
$ | 1,612 | 6,871 | 8,483 | 106,500 | 114,983 | - | |||||
Single-family residential
|
18,927 | 4,106 | 23,033 | 258,012 | 281,045 | 185 | ||||||
Commercial
|
2,875 | 530 | 3,405 | 209,275 | 212,680 | - | ||||||
Multifamily and farmland
|
- | - | - | 6,361 | 6,361 | - | ||||||
Total real estate loans
|
23,414 | 11,507 | 34,921 | 580,148 | 615,069 | 185 | ||||||
Commercial loans (not secured by real estate)
|
651 | 75 | 726 | 57,791 | 58,517 | - | ||||||
Consumer loans (not secured by real estate)
|
46 | 9 | 55 | 10,654 | 10,709 | - | ||||||
All other loans (not secured by real estate)
|
- | - | - | 26,871 | 26,871 | - | ||||||
Total loans
|
$ | 24,111 | 11,591 | 35,702 | 675,464 | 711,166 | 185 |
December 31, 2010
|
||||||||||||
(Dollars in thousands)
|
||||||||||||
Loans 30-89 Days Past
Due
|
Loans 90 or More Days Past Due
|
Total
Past Due Loans
|
Total
Current Loans
|
Total
Loans
|
Accruing Loans 90 or More Days Past Due
|
|||||||
Real Estate Loans
|
||||||||||||
Construction and land development
|
$ | 2,306 | 8,870 | 11,176 | 112,872 | 124,048 | 197 | |||||
Single-family residential
|
19,377 | 5,936 | 25,313 | 261,994 | 287,307 | - | ||||||
Commercial
|
382 | 1,482 | 1,864 | 211,623 | 213,487 | - | ||||||
Multifamily and Farmland
|
- | - | - | 6,456 | 6,456 | - | ||||||
Total real estate loans
|
22,065 | 16,288 | 38,353 | 592,945 | 631,298 | 197 | ||||||
Commercial loans (not secured by real estate)
|
1,098 | 720 | 1,818 | 59,176 | 60,994 | 13 | ||||||
Farm loans (not secured by real estate)
|
- | - | - | - | - | - | ||||||
Consumer loans (not secured by real estate)
|
98 | 13 | 111 | 11,389 | 11,500 | - | ||||||
All other loans (not secured by real estate)
|
- | - | - | 22,368 | 22,368 | - | ||||||
Total loans
|
$ | 23,261 | 17,021 | 40,282 | 685,878 | 726,160 | 210 |
(Dollars in thousands)
|
||||
March 31, 2011
|
December 31, 2010
|
|||
Real Estate Loans
|
||||
Construction and land development
|
$ | 20,874 | 22,916 | |
Single-family residential
|
8,404 | 10,837 | ||
Commercial
|
3,121 | 5,351 | ||
Multifamily and Farmland
|
- | - | ||
Total real estate loans
|
32,399 | 39,104 | ||
Commercial loans (not secured by real estate)
|
417 | 816 | ||
Consumer loans (not secured by real estate)
|
133 | 142 | ||
All other loans (not secured by real estate)
|
- | - | ||
Total
|
$ | 32,949 | 40,062 |
March 31, 2011 | ||||||||||||
(Dollars in thousands)
|
||||||||||||
Unpaid Contractual Principal
Balance
|
Recorded Investment
With No Allowance
|
Recorded Investment
With
Allowance
|
Recorded Investment
in Impaired
Loans
|
Related
Allowance
|
Average
Recorded Impairment
|
|||||||
Real Estate Loans
|
- | |||||||||||
Construction and land development
|
$ | 28,972 | 18,255 | 2,619 | 20,874 | 121 | 21,895 | |||||
Single-family residential
|
9,605 | 8,277 | 127 | 8,404 | 1,258 | 9,621 | ||||||
Commercial
|
3,699 | 2,765 | 356 | 3,121 | 149 | 4,236 | ||||||
Multifamily and farmland
|
- | - | - | - | - | - | ||||||
Total impaired real estate loans
|
42,276 | 29,297 | 3,102 | 32,399 | 1,528 | 35,751 | ||||||
Commercial loans (not secured by real estate)
|
453 | 153 | 264 | 417 | 89 | 617 | ||||||
Consumer loans (not secured by real estate)
|
146 | 133 | - | 133 | - | 137 | ||||||
All other loans (not secured by real estate)
|
- | - | - | - | - | - | ||||||
Total impaired loans
|
$ | 42,875 | 29,583 | 3,366 | 32,949 | 1,617 | 36,506 |
December 31, 2010
|
||||||||||||
(Dollars in thousands)
|
||||||||||||
Unpaid Contractual Principal
Balance
|
Recorded Investment
With No Allowance
|
Recorded Investment
With
Allowance
|
Recorded
Investment
in Impaired
Loans
|
Related Allowance
|
Average Recorded Impairment
|
|||||||
Real Estate Loans
|
$
|
|
||||||||||
Construction and land development
|
31,346
|
20,787
|
2,130
|
22,916
|
1,055
|
18,767
|
||||||
Single-family residential
|
12,376
|
9,847
|
990
|
10,837
|
168
|
12,573
|
||||||
Commercial
|
6,018
|
4,991
|
359
|
5,351
|
148
|
4,769
|
||||||
Multifamily and Farmland
|
-
|
-
|
-
|
-
|
-
|
27
|
||||||
Total impaired real estate loans
|
49,740
|
35,625
|
3,479
|
39,104
|
1,371
|
36,136
|
||||||
Commercial loans (not secured by real estate)
|
1,243
|
811
|
5
|
816
|
5
|
1,479
|
||||||
Farm loans (non RE)
|
-
|
|||||||||||
Consumer loans (not secured by real estate)
|
152
|
142
|
-
|
142
|
-
|
79
|
||||||
All other loans (not secured by real estate)
|
-
|
-
|
-
|
-
|
-
|
|||||||
Total impaired loans
|
$
|
51,135
|
36,578
|
3,484
|
40,062
|
1,376
|
37,694
|
|||||
Three months ended March 31, 2011
|
|||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Real Estate Loans
|
|||||||||||||||||
Construction and Land Development
|
Single Family Residential
|
Commercial Real Estate
|
Multifamily & Farmland
|
Commercial
|
Consumer
|
Unallocated
|
Total
|
||||||||||
Allowance for loan losses:
|
|||||||||||||||||
Beginning balance
|
$ | 5,774 | 6,097 | 1,409 | 17 | 1,174 | 430 | 592 | 15,493 | ||||||||
Charge-offs
|
(1,999 | ) | (663 | ) | (487 | ) | - | (41 | ) | (155 | ) | - | (3,345 | ) | |||
Recoveries
|
199 | 24 | 2 | - | 34 | 53 | - | 312 | |||||||||
Provision
|
1,416 | 387 | 717 | - | 9 | 17 | 404 | 2,950 | |||||||||
Ending balance
|
$ | 5,390 | 5,845 | 1,641 | 17 | 1,176 | 345 | 996 | 15,410 | ||||||||
Ending balance: Individually
|
|||||||||||||||||
evaluated for impairment
|
$ | 121 | 1,258 | 149 | - | 89 | - | - | 1,617 | ||||||||
Ending balance: Collectively
|
|||||||||||||||||
evaluated for impairment
|
5,269 | 4,587 | 1,492 | 17 | 1,087 | 345 | 996 | 13,793 | |||||||||
Ending balance
|
$ | 5,390 | 5,845 | 1,641 | 17 | 1,176 | 345 | 996 | 15,410 |
·
|
Risk Grade 1 – Excellent Quality: Loans are well above average quality and a minimal amount of credit risk exists. CD or cash secured loans or properly margined actively traded stock or bond secured loans would fall in this grade.
|
·
|
Risk Grade 2 – High Quality: Loans are of good quality with risk levels well within the Company’s range of acceptability. The organization or individual is established with a history of successful performance though somewhat susceptible to economic changes.
|
·
|
Risk Grade 3 – Good Quality: Loans of average quality with risk levels within the Company’s range of acceptability but higher than normal. This may be a new organization or an existing organization in a transitional phase (e.g. expansion, acquisition, market change).
|
·
|
Risk Grade 4 – Management Attention: These loans have very high risk and servicing needs but still are acceptable. Evidence of marginal performance or deteriorating trends are evident. These are not problem credits presently, but may be in the future if the borrower is unable to change its present course.
|
·
|
Risk Grade 5 – Watch: These loans are currently performing satisfactorily, but there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Company’s position at some future date. This frequently results from deviating from prudent lending practices, for instance over-advancing on collateral.
|
·
|
Risk Grade 6 – Substandard: A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged (if there is any). There is a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
|
·
|
Risk Grade 7 – Low Substandard: These loans have the general characteristics of a Grade 6 Substandard loan, with heightened potential concerns. The exact amount of loss is not yet known because neither the liquidation value of the collateral nor the borrower’s predicted repayment ability is known with confidence.
|
·
|
Risk Grade 8 – Doubtful: Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is charged off.
|
·
|
Risk Grade 9 – Loss: Loans classified Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be realized in the future. Loss is a temporary grade until the appropriate authority is obtained to charge the loan off.
|
March 31, 2011 | |||||||
(Dollars in thousands)
|
|||||||
Weighted Average
Risk Grade of Loans Outstanding
|
Loans
Outstanding
|
Classified
Loans
|
|||||
Real Estate Loans
|
|||||||
Construction and land development
|
4.14 | $ | 114,983 | 26,355 | |||
Single-family residential
|
2.97 | 281,045 | 13,561 | ||||
Commercial
|
3.31 | 212,680 | 10,626 | ||||
Multifamily and farmland
|
2.84 | 6,361 | 218 | ||||
Total real estate loans
|
615,069 | 50,760 | |||||
Commercial loans (not secured by real estate)
|
3.04 | 58,517 | 1,051 | ||||
Consumer loans (not secured by real estate)
|
2.47 | 10,709 | 145 | ||||
All other loans (not secured by real estate)
|
2.76 | 26,871 | - | ||||
Total loans
|
$ | 711,166 | 51,956 | (1) | |||
(1) Includes $36.5 million TDR loans
|
December 31, 2010
|
|||||||
(Dollars in thousands)
|
|||||||
Weighted Average
Risk Grade of Loans Outstanding
|
Loans
Outstanding
|
Classified
Loans
|
|||||
Real Estate Loans
|
|||||||
Construction and land development
|
4.19 | $ | 124,048 | 29,890 | |||
Single-family residential
|
2.97 | 287,307 | 15,859 | ||||
Commercial
|
3.33 | 213,487 | 12,965 | ||||
Multifamily and Farmland
|
2.83 | 6,456 | 223 | ||||
Total real estate loans
|
631,298 | 58,936 | |||||
Commercial loans (not secured by real estate)
|
3.09 | 60,994 | 1,710 | ||||
Farm loans (non RE)
|
- | ||||||
Consumer loans (not secured by real estate)
|
2.48 | 11,500 | 151 | ||||
All other loans (not secured by real estate)
|
2.77 | 22,368 | - | ||||
Total loans
|
$ | 726,160 | 60,797 | (1) | |||
(1) Includes $39.2 million TDR loans
|
(Dollars in thousands)
|
|||||||
Number of Contracts
|
Pre-Modification Outstanding
Recorded
Investment
|
Post-Modification Outstanding
Recorded
Investment
|
|||||
Real Estate Loans
|
|||||||
Construction and land development
|
41 | $ | 26,045 | 21,079 | |||
Single-family residential
|
229 | 26,359 | 24,854 | ||||
Commercial
|
16 | 7,521 | 3,941 | ||||
Multifamily and farmland
|
1 | 322 | 218 | ||||
Total real estate TDR loans
|
287 | 60,247 | 50,092 | ||||
Commercial loans (not secured by real estate)
|
23 | 5,702 | 1,786 | ||||
Consumer loans (not secured by real estate)
|
10 | 142 | 133 | ||||
All other loans (not secured by real estate)
|
- | - | - | ||||
Total TDR loans
|
320 | $ | 66,091 | 52,011 |
(4)
|
Net Earnings Per Common Share
|
For the three months ended March 31, 2011
|
|||||||
Net Earnings Available to Common Shareholders (Dollars in thousands)
|
Common Shares
|
Per Share Amount
|
|||||
Basic earnings per common share
|
$ | 1,013 | 5,541,542 | $ | 0.18 | ||
Effect of dilutive securities:
|
|||||||
Stock options
|
- | 1,552 | |||||
Diluted earnings per common share
|
$ | 1,013 | 5,543,094 | $ | 0.18 |
For the three months ended March 31, 2010
|
|||||||
Net Earnings Available to Common Shareholders (Dollars in thousands)
|
Common Shares
|
Per Share Amount
|
|||||
Basic earnings per common share
|
$ | 527 | 5,539,056 | $ | 0.10 | ||
Effect of dilutive securities:
|
|||||||
Stock options
|
- | 4,705 | |||||
Diluted earnings per common share
|
$ | 527 | 5,543,761 | $ | 0.09 |
(5)
|
Stock-Based Compensation
|
(6)
|
Fair Value
|
(Dollars in thousands)
|
||||||||
Fair Value Measurements March 31, 2011
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
|||||
Investment securities available for sale
|
$ | 271,570 | 1,253 | 269,067 | 1,250 | |||
Mortgage loans held for sale
|
$ | 2,415 | - | 2,415 | - | |||
Market value of derivatives (in other assets)
|
$ | 264 | - | 264 | - |
(Dollars in thousands)
|
||||||||
Fair Value Measurements December 31, 2010
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
|||||
Investment securities available for sale
|
$ | 272,449 | 1,369 | 269,830 | 1,250 | |||
Mortgage loans held for sale
|
$ | 3,814 | - | 3,814 | - | |||
Market value of derivatives (in other assets)
|
$ | 648 | - | 648 | - |
(Dollars in thousands)
|
||
Investment Securities Available for Sale
|
||
Level 3 Valuation
|
||
Balance, beginning of period
|
$ | 1,250 |
Change in book value
|
- | |
Change in gain/(loss) realized and unrealized
|
- | |
Purchases/(sales)
|
- | |
Transfers in and/or out of Level 3
|
- | |
Balance, end of period
|
$ | 1,250 |
Change in unrealized gain/(loss) for assets still held in Level 3
|
$ | - |
(Dollars in thousands)
|
||||||||||
Fair Value Measurements
March 31, 2011
|
Level 1 Valuation
|
Level 2 Valuation
|
Level 3 Valuation
|
Total Gains/(Losses) for
the Three Months Ended
March 31, 2011
|
||||||
Impaired loans
|
$ | 32,949 | - | 21,578 | 11,371 | (3,246) | ||||
Other real estate
|
$ | 6,358 | - | 6,358 | - | (347) | ||||
(Dollars in thousands)
|
||||||||||
Fair Value Measurements December 31, 2010
|
Level 1 Valuation
|
Level 2 Valuation
|
Level 3 Valuation
|
Total Gains/(Losses) for the Year Ended December 31,
2010
|
||||||
Impaired loans
|
$ | 40,062 | - | 26,798 | 13,264 | (10,591) | ||||
Other Real Estate
|
$ | 6,673 | - | 6,673 | - | (340) |
(Dollars in thousands)
|
||||||||
March 31, 2011
|
December 31, 2010
|
|||||||
Carrying Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
|||||
Assets:
|
||||||||
Cash and cash equivalents
|
$ | 46,253 | 46,253 | 23,977 | 23,977 | |||
Certificates of deposit
|
735 | 735 | 735 | 735 | ||||
Investment securities available for sale
|
271,570 | 271,570 | 272,449 | 272,449 | ||||
Other investments
|
5,976 | 5,976 | 5,761 | 5,761 | ||||
Mortgage loans held for sale
|
2,415 | 2,415 | 3,814 | 3,814 | ||||
Loans, net
|
695,756 | 692,216 | 710,667 | 710,880 | ||||
Cash surrender value of life insurance
|
7,599 | 7,599 | 7,539 | 7,539 | ||||
Derivative instruments
|
264 | 264 | 648 | 648 | ||||
Liabilities:
|
||||||||
Deposits and demand notes payable
|
$ | 839,823 | 839,343 | 840,312 | 839,379 | |||
Securities sold under agreements
|
||||||||
to repurchase
|
38,446 | 38,446 | 34,094 | 34,094 | ||||
FHLB borrowings
|
70,000 | 80,189 | 70,000 | 79,950 | ||||
Junior subordinated debentures
|
20,619 | 20,619 | 20,619 | 20,619 |
(7)
|
Derivative Instruments and Hedging Activities
|
(Dollars in thousands)
|
|||||||||
Asset Derivatives
|
|||||||||
As of March 31, 2011
|
As of December 31, 2010
|
||||||||
Balance Sheet
Location
|
Fair Value
|
Balance Sheet
Location
|
Fair Value
|
||||||
Interest rate derivative contracts
|
Other assets
|
$ | 264 |
Other assets
|
$ | 648 |
(Dollars in thousands)
|
|||||||||
Location of Gain | Amount of Gain | ||||||||
Amount of Gain | (Loss) Reclassified | (Loss) Reclassified | |||||||
(Loss) Recognized in | from Accumulated | from Accumulated | |||||||
OCI on Derivatives | OCI into Income | OCI into Income | |||||||
Three months ended
March 31,
|
Three months ended
March 31,
|
||||||||
2011
|
2010
|
2011
|
2010
|
||||||
Interest rate derivative contracts
|
$ (10)
|
$ 227
|
Interest income
|
$ 374
|
$ 374
|
DERIVATIVE INSTRUMENTS AS OF MARCH 31, 2011
|
|||||||
(Dollars in thousands)
|
|||||||
Type of Derivative
|
Notional
Amount
|
Contract
Rate
|
Year-to-date Income
|
||||
Interest rate swap contact expiring 06/01/11
|
$ | 50,000 | 6.245% | $ | 374 |
(Dollars in thousands)
|
|||||||||
Amount of Gain
(Loss) Recognized in
OCI on Derivatives
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
|
Amount of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
|
|||||||
Three months ended
March 31,
|
Three months ended
March 31,
|
||||||||
2011
|
2010
|
2011
|
2010
|
||||||
Interest rate derivative contracts
|
$ (10)
|
$ 227
|
Interest income
|
$ 374
|
$ 374
|
(Dollars in thousands)
|
||||||||
Fair Value Measurements
March 31, 2011
|
Level 1 Valuation
|
Level 2 Valuation
|
Level 3 Valuation
|
|||||
Investment securities available for sale
|
$ | 271,570 | 1,253 | 269,067 | 1,250 | |||
Mortgage loans held for sale
|
$ | 2,415 | - | 2,415 | - | |||
Market value of derivatives (in other assets)
|
$ | 264 | - | 264 | - | |||
(Dollars in thousands) | ||||||||
Fair Value | ||||||||
Measurements | Level 1 | Level 2 | Level 3 | |||||
December 31, 2010 | Valuation | Valuation | Valuation | |||||
Investment securities available for sale | $ | 272,449 | 1,369 | 269,830 | 1,250 | |||
Mortgage loans held for sale | $ | 3,814 | - | 3,814 | - | |||
Market value of derivatives (in other assets) | $ | 648 | - | 648 | - |
(Dollars in thousands)
|
||
Investment Securities Available for Sale
|
||
Level 3 Valuation
|
||
Balance, beginning of period
|
$ | 1,250 |
Change in book value
|
- | |
Change in gain/(loss) realized and unrealized
|
- | |
Purchases/(sales)
|
- | |
Transfers in and/or out of Level 3
|
- | |
Balance, end of period
|
$ | 1,250 |
Change in unrealized gain/(loss) for assets still held in Level 3
|
$ | - |
(Dollars in thousands)
|
||||||||||
Fair Value Measurements March 31, 2011
|
Level 1 Valuation
|
Level 2 Valuation
|
Level 3 Valuation
|
Total Gains/(Losses) for the
Three Months Ended
March 31, 2011
|
||||||
Impaired loans
|
$ | 32,949 | - | 21,578 | 11,371 | (3,246) | ||||
Other real estate
|
$ | 6,358 | - | 6,358 | - | (347) |
Fair Value Measurements December 31, 2010
|
Level 1 Valuation
|
Level 2 Valuation
|
Level 3 Valuation
|
Total Gains/(Losses) for the
Year Ended December 31,
2010
|
||||||
Impaired loans
|
$ | 40,062 | - | 26,798 | 13,264 | (10,591) | ||||
Other Real Estate
|
$ | 6,673 | - | 6,673 | - | (340) |
AD&C Loans
|
||||||||
(Dollars in thousands)
|
Number of Loans
|
Balance Outstanding
|
Non-accrual Balance
|
|||||
Land acquisition and development - commercial purposes
|
79 | $ | 23,500 | $ | 3,044 | |||
Land acquisition and development - residential purposes
|
361 | 78,533 | 17,118 | |||||
1 to 4 family residential construction
|
40 | 11,443 | 644 | |||||
Commercial construction
|
5 | 1,694 | 254 | |||||
Total acquisition, development and construction
|
485 | $ | 115,170 | $ | 21,060 |
·
|
our loan loss experience;
|
·
|
the amount of past due and non-performing loans;
|
·
|
specific known risks;
|
·
|
the status and amount of other past due and non-performing assets;
|
·
|
underlying estimated values of collateral securing loans;
|
·
|
current and anticipated economic conditions; and
|
·
|
other factors which management believes affect the allowance for potential credit losses.
|
LOAN RISK GRADE ANALYSIS:
|
||
Percentage of Loans
|
||
By Risk Grade*
|
||
Risk Grade
|
03/31/2011
|
12/31/2010
|
Risk Grade 1 (Excellent Quality)
|
3.34%
|
3.36%
|
Risk Grade 2 (High Quality)
|
17.05%
|
16.60%
|
Risk Grade 3 (Good Quality)
|
47.30%
|
47.00%
|
Risk Grade 4 (Management Attention)
|
21.86%
|
21.31%
|
Risk Grade 5 (Watch)
|
2.89%
|
2.84%
|
Risk Grade 6 (Substandard)
|
2.65%
|
3.09%
|
Risk Grade 7 (Low Substandard)
|
0.00%
|
0.00%
|
Risk Grade 8 (Doubtful)
|
0.00%
|
0.00%
|
Risk Grade 9 (Loss)
|
0.00%
|
0.00%
|
* Excludes non-accrual loans
|
(Dollars in thousands)
|
||||
March 31, 2011
|
December 31, 2010
|
|||
Contractual Cash Obligations
|
||||
Long-term borrowings
|
$ | 70,000 | 70,000 | |
Junior subordinated debentures
|
20,619 | 20,619 | ||
Operating lease obligations
|
2,988 | 3,220 | ||
Total
|
$ | 93,607 | 93,839 | |
Other Commitments
|
||||
Commitments to extend credit
|
$ | 129,297 | 137,015 | |
Standby letters of credit and financial guarantees written
|
3,171 | 3,590 | ||
Total
|
$ | 132,468 | 140,605 |
PART II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
In the opinion of management, the Company is not involved in any material pending legal proceedings other than routine proceedings occurring in the ordinary | |
course of business. |
Item 1A.
|
Risk Factors
|
Not required for smaller reporting companies. |
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
|||||||||
Period
|
Total
Number of
Shares
Purchased
|
Average
Price Paid
per Share
|
Total
Number of
Shares
Purchased as
Part of
Publicly Announced
Plans or
Programs
|
Maximum
Number of
Shares that
May Yet Be Purchased
Under the Plans
or Programs
|
|||||
January 1 - 31, 2011
|
2,080 | $ | 6.33 | - | - | ||||
February 1 - 28, 2011
|
- | - | - | - | |||||
March 1 - 31, 2011
|
740 | 7.10 | - | - | |||||
Total
|
2,820 | (1) | $ | 6.53 | - | ||||
(1) The Company purchased 2,820 shares on the open market in the three months ended March 31, 2011for its deferred compensation plan. All purchases were funded by participant contributions to the plan. The Purchase Agreement with the UST under the CPP program permits the Company to purchase its common stock on the open market pursuant to benefit plans.
|
Item 3.
|
Defaults Upon Senior Securities
|
Not applicable
|
|
Item 5.
|
Other Information
|
Not applicable
|
|
Item 6.
|
Exhibits
|
Exhibit (3)(1)
|
Articles of Amendment dated December 19, 2008, regarding the Series A
|
|
Preferred Stock, incorporated by reference to Exhibit (3)(1) to the Form 8-K filed
|
||
with the Securities and Exchange Commission on December 29, 2008
|
||
Exhibit (3)(2)
|
Articles of Amendment dated February 26, 2010, incorporated by reference to
|
|
Exhibit (3)(2) to the Form 10-K filed with the Securities and Exchange
|
||
Commission on March 25, 2010
|
||
Exhibit (3)(i)
|
Articles of Incorporation of Peoples Bancorp of North Carolina, Inc.,
|
|
incorporated by reference to Exhibit (3)(i) to the Form 8-A filed with the
|
||
Securities and Exchange Commission on September 2, 1999
|
||
Exhibit (3)(ii)
|
Amended and Restated Bylaws of Peoples Bancorp of North Carolina, Inc.,
|
|
incorporated by reference to Exhibit (3)(ii) to the Form 10-K filed with the
|
||
Securities and Exchange Commission on March 25, 2010
|
Exhibit (4)
|
Specimen Stock Certificate, incorporated by reference to Exhibit (4) to the Form
|
|
8-A filed with the Securities and Exchange Commission on September 2, 1999
|
||
Exhibit (4)(1)
|
Form of Certificate for the Series A Preferred Stock, incorporated by reference to
|
|
Exhibit (4)(1) to the Form 8-K filed with the Securities and Exchange
|
||
Commission on December 29, 2008
|
||
Exhibit (4)(2)
|
Warrant dated December 23, 2008, for the purchase of shares of Common Stock,
|
|
incorporated by reference to Exhibit (4)(2) to the Form 8-K filed with the
|
||
Securities and Exchange Commission on December 29, 2008
|
||
Exhibit (10)(1)
|
Letter Agreement dated December 23, 2008 between the Registrant and the
|
|
United States Department of the Treasury, incorporated by reference to Exhibit
|
||
(10)(1) to the Form 8-K filed with the Securities and Exchange Commission on
|
||
December 29, 2008
|
||
Exhibit (10)(a)(i)
|
Employment Letter Agreement dated December 23, 2008 between Peoples
|
|
Bancorp of North Carolina, Inc. and Tony W. Wolfe, incorporated by reference
|
||
to Exhibit (10)(a)(i) to the Form 8-K filed with the Securities and Exchange
|
||
Commission on December 29, 2008
|
||
Exhibit (10)(a)(ii)
|
Amendment to Employment Agreement between Peoples Bank and Tony W.
|
|
Wolfe dated December 18, 2008, incorporated by reference to Exhibit (10)(a)(ii)
|
||
to the Form 8-K filed with the Securities and Exchange Commission on
|
||
December 29, 2008
|
||
Exhibit (10)(a)(iii)
|
Amended and Restated Executive Salary Continuation Agreement between
|
|
Peoples Bank and Tony W. Wolfe dated December 18, 2008, incorporated by
|
||
reference to Exhibit (10)(a)(iii) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(b)(i)
|
Employment Letter Agreement dated December 23, 2008 between Peoples
|
|
Bancorp of North Carolina, Inc. and Joseph F. Beaman, Jr., incorporated by
|
||
reference to Exhibit (10)(b)(i) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(b)(ii)
|
Amendment to Employment Agreement between Peoples Bank and Joseph F.
|
|
Beaman, Jr. dated December 18, 2008, incorporated by reference to Exhibit
|
||
(10)(b)(ii) to the Form 8-K filed with the Securities and Exchange Commission
|
||
on December 29, 2008
|
||
Exhibit (10)(b)(iii)
|
Amended and Restated Executive Salary Continuation Agreement between
|
|
Peoples Bank and Joseph F. Beaman, Jr. dated December 18, 2008, incorporated
|
||
by reference to Exhibit (10)(b)(iii) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(c)(i)
|
Employment Letter Agreement dated December 23, 2008 between Peoples
|
|
Bancorp of North Carolina, Inc. and William D. Cable, Sr., incorporated by
|
||
reference to Exhibit (10)(c)(i) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(c)(ii)
|
Amendment to Employment Agreement between Peoples Bank and William D.
|
|
Cable, Sr. dated December 18, 2008, incorporated by reference to Exhibit
|
||
(10)(c)(ii) to the Form 8-K filed with the Securities and Exchange Commission
|
||
on December 29, 2008
|
Exhibit (10)(c)(iii)
|
Amended and Restated Executive Salary Continuation Agreement between
|
|
Peoples Bank and William D. Cable, Sr. dated December 18, 2008, incorporated
|
||
by reference to Exhibit (10)(c)(iii) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
Exhibit (10)(d)(i)
|
Employment Letter Agreement dated December 23, 2008 between Peoples
|
|
Bancorp of North Carolina, Inc. and Lance A. Sellers, incorporated by reference
|
||
to Exhibit (10)(d)(i) to the Form 8-K filed with the Securities and Exchange
|
||
Commission on December 29, 2008
|
||
Exhibit (10)(d)(ii)
|
Amendment to Employment Agreement between Peoples Bank and Lance A.
|
|
Sellers dated December 18, 2008, incorporated by reference to Exhibit (10)(d)(ii)
|
||
to the Form 8-K filed with the Securities and Exchange Commission on
|
||
December 29, 2008
|
||
Exhibit (10)(d)(iii)
|
Amended and Restated Executive Salary Continuation Agreement between
|
|
Peoples Bank and Lance A. Sellers dated December 18, 2008, incorporated by
|
||
reference to Exhibit (10)(d)(iii) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(e)
|
Peoples Bancorp of North Carolina, Inc. Omnibus Stock Ownership and Long
|
|
Term Incentive Plan incorporated by reference to Exhibit (10)(f) to the Form 10-
|
||
K filed with the Securities and Exchange Commission on March 30, 2000
|
||
Exhibit (10)(e)(i)
|
Amendment No. 1 to the Peoples Bancorp of North Carolina, Inc. Omnibus Stock
|
|
Ownership and Long Term Incentive Plan incorporated by reference to Exhibit
|
||
(10)(e)(i) to the Form 10-K filed with the Securities and Exchange Commission
|
||
on March 15, 2007
|
||
Exhibit (10)(f)(i)
|
Employment Letter Agreement dated December 23, 2008 between Peoples
|
|
Bancorp of North Carolina, Inc. and A. Joseph Lampron, incorporated by
|
||
reference to Exhibit (10)(f)(i) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(f)(ii)
|
Amendment to Employment Agreement between Peoples Bank and A. Joseph
|
|
Lampron dated March 18, 2010, incorporated by reference to Exhibit (10)(f)(ii)
|
||
to the Form 10-K filed with the Securities and Exchange Commission on March
|
||
25, 2010
|
||
Exhibit (10)(f)(iii)
|
Amended and Restated Executive Salary Continuation Agreement between
|
|
Peoples Bank and A. Joseph Lampron dated December 18, 2008, incorporated by
|
||
reference to Exhibit (10)(f)(iii) to the Form 8-K filed with the Securities and
|
||
Exchange Commission on December 29, 2008
|
||
Exhibit (10)(g)
|
Peoples Bank Directors' and Officers' Deferral Plan, incorporated by reference to
|
|
Exhibit (10)(h) to the Form 10-K filed with the Securities and Exchange
|
||
Commission on March 28, 2002
|
||
Exhibit (10)(h)
|
Rabbi Trust for the Peoples Bank Directors' and Officers' Deferral Plan,
|
|
incorporated by reference to Exhibit (10)(i) to the Form 10-K filed with the
|
||
Securities and Exchange Commission on March 28, 2002
|
||
Exhibit (10)(i)
|
Description of Service Recognition Program maintained by Peoples Bank,
|
|
incorporated by reference to Exhibit (10)(i) to the Form 10-K filed with the
|
||
Securities and Exchange Commission on March 27, 2003
|
||
Exhibit (10)(j)
|
Capital Securities Purchase Agreement dated as of June 26, 2006, by and among
|
|
Peoples Bancorp of North Carolina, Inc., PEBK Capital Trust II and Bear, Sterns
|
||
Securities Corp., incorporated by reference to Exhibit (10)(j) to the Form 10-Q
|
||
filed with the Securities and Exchange Commission on November 13, 2006
|
Exhibit (10)(k)
|
Amended and Restated Trust Agreement of PEBK Capital Trust II, dated as of
|
|
June 28, 2006 incorporated by reference to Exhibit (10)(k) to the Form 10-Q filed
|
||
with the Securities and Exchange Commission on November 13, 2006
|
Exhibit (10)(l)
|
Guarantee Agreement of Peoples Bancorp of North Carolina, Inc. dated as of
|
|
June 28, 2006 incorporated by reference to Exhibit (10)(l) to the Form 10-Q filed
|
||
with the Securities and Exchange Commission on November 13, 2006
|
||
Exhibit (10)(m)
|
Indenture, dated as of June 28, 2006, by and between Peoples Bancorp of North
|
|
Carolina, Inc. and LaSalle Bank National Association, as Trustee, relating to
|
||
Junior Subordinated Debt Securities Due September 15, 2036, incorporated by
|
||
reference to Exhibit (10)(m) to the Form 10-Q filed with the Securities and
|
||
Exchange Commission on November 13, 2006
|
||
Exhibit (10)(n)
|
Form of Amended and Restated Director Supplemental Retirement Agreement
|
|
between Peoples Bank and Directors Robert C. Abernethy, James S. Abernethy,
|
||
Douglas S. Howard, John W. Lineberger, Jr., Gary E. Matthews, Dr. Billy L.
|
||
Price, Jr., Larry E. Robinson, W. Gregory Terry, Dan Ray Timmerman, Sr. and
|
||
Benjamin I. Zachary, incorporated by reference to Exhibit (10)(n) to the Form 8-
|
||
K filed with the Securities and Exchange Commission on December 29, 2008
|
||
Exhibit (10)(o)
|
2009 Peoples Bancorp of North Carolina, Inc. Omnibus Stock Ownership and
|
|
Long Term Incentive Plan incorporated by reference to Exhibit (10)(o) to the
|
||
Form 10-K filed with the Securities and Exchange Commission on March 20,
|
||
2009
|
||
Exhibit (14)
|
Code of Business Conduct and Ethics of Peoples Bancorp of North Carolina,
|
|
Inc., incorporated by reference to Exhibit (14) to the Form 10-K filed with the
|
||
Securities and Exchange Commission on March 25, 2005
|
||
Exhibit (31)(a)
|
Certification of principal executive officer pursuant to section 302 of the
|
|
Sarbanes-Oxley Act of 2002
|
||
Exhibit (31)(b)
|
Certification of principal financial officer pursuant to section 302 of the
|
|
Sarbanes-Oxley Act of 2002
|
||
Exhibit (32)
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
|
|
906 of the Sarbanes-Oxley Act of 2002
|
Peoples Bancorp of North Carolina, Inc.
|
||
May 12, 2011
|
/s/ Tony W. Wolfe
|
|
Date
|
Tony W. Wolfe
|
|
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
May 12, 2011
|
/s/ A. Joseph Lampron, Jr.
|
|
Date
|
A. Joseph Lampron, Jr.
|
|
Executive Vice President and Chief Financial Officer
|
||
(Principal Financial and Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Peoples Bancorp of North Carolina Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
May 12, 2011
|
/s/ Tony W. Wolfe
|
|
Date
|
Tony W. Wolfe
|
|
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Peoples Bancorp of North Carolina Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation ; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
May 12, 2011
|
/s/ A. Joseph Lampron, Jr.
|
|
Date
|
A. Joseph Lampron, Jr.
|
|
Executive Vice President and Chief Financial Officer
|
||
(Principal Financial and Principal Accounting Officer)
|
Dated: May 12, 2011
|
/s/ Tony W. Wolfe
|
||
Tony W. Wolfe
|
|||
Chief Executive Officer
|
|||
Dated: May 12, 2011
|
/s/ A. Joseph Lampron, Jr.
|
||
A. Joseph Lampron, Jr.
|