UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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______________________________
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): July 27, 2012
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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)
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000-27205
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56-2132396
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(Commission File No.)
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(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)
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(Zip Code)
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(828) 464-5620
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(Registrant’s Telephone Number, Including Area Code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Peoples Bancorp of North Carolina, Inc.
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INDEX
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Page
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Item 2.02 - Results of Operations and Financial Condition
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3
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Item 9.01 - Financial Statements and Exhibits
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3
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Signatures
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4
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Exhibit (99)(a) Press Release dated July 27, 2012
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5
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Item 2.02.
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Results of Operations and Financial Condition
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Item 9.01.
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Financial Statements and Exhibits
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(d)
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Exhibits
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(99)(a)
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Press release, dated July 27, 2012
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SIGNATURES
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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.
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PEOPLES BANCORP OF NORTH CAROLINA, INC.
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Date: July 27, 2012
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By:
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/s/ A. Joseph Lampron, Jr.
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A. Joseph Lampron, Jr.
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Executive Vice President and Chief Financial Officer
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EXHIBIT (99)(a)
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NEWS RELEASE
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July 27, 2012
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Contact:
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Tony W. Wolfe
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President and Chief Executive Officer
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A. Joseph Lampron, Jr.
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Executive Vice President and Chief Financial Officer
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828-464-5620, Fax 828-465-6780
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For Immediate Release
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PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS
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·
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Net earnings were $1.5 million or $0.27 basic and diluted net earnings per share for the three months ended June 30, 2012, before adjustment for preferred stock dividends and accretion, as compared to $629,000 or $0.11 basic and diluted net earnings per share, before adjustment for preferred stock dividends and accretion, for the same period one year ago.
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·
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Net earnings available to common shareholders were $1.2 million or $0.21 basic and diluted net earnings per common share for the three months ended June 30, 2012, as compared to $281,000 or $0.05 basic and diluted net earnings per common share, for the same period one year ago.
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Earnings before securities gains and income taxes were $1.3 million for the three months ended June 30, 2012 compared to $392,000 for the same period one year ago.
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Core deposits were $622.6 million, or 79.77% of total deposits at June 30, 2012, compared to $615.1 million, or 74.07% of total deposits at June 30, 2011.
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The Company purchased 12,530 shares of the Company’s 25,054 outstanding shares of preferred stock from the U.S. Department of the Treasury (“Treasury”), which was issued to Treasury in connection with the Company’s participation in the TARP Capital Purchase Program (“CPP”) in 2008. The shares were purchased for $933.36 per share, for a total purchase price of $11,778,575.90, including $83,575.10 accrued and unpaid dividends on the preferred stock. The Company retired the 12,530 shares purchased. The $834,999.20 difference between the $12,530,000 book value of the preferred stock retired and the $11,695,000.80 purchase price of the preferred stock retired was credited to retained earnings, effective June 30, 2012.
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CONSOLIDATED BALANCE SHEETS
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June 30, 2012, December 31, 2011 and June 30, 2011
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(Dollars in thousands)
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June 30, 2012
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December 31, 2011
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June 30, 2011
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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Cash and due from banks
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$ | 25,350 | $ | 22,532 | $ | 25,532 | |||
Interest bearing deposits
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44,127 | 6,704 | 16,103 | ||||||
Cash and cash equivalents
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69,477 | 29,236 | 41,635 | ||||||
Certificates of deposits
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- | - | 735 | ||||||
Investment securities available for sale
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280,735 | 321,388 | 297,606 | ||||||
Other investments
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5,734 | 5,712 | 5,840 | ||||||
Total securities
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286,469 | 327,100 | 303,446 | ||||||
Mortgage loans held for sale
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3,753 | 5,146 | 1,967 | ||||||
Loans
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642,815 | 670,497 | 692,813 | ||||||
Less: Allowance for loan losses
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(16,640 | ) | (16,604 | ) | (15,984 | ) | |||
Net loans
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626,175 | 653,893 | 676,829 | ||||||
Premises and equipment, net
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16,342 | 16,896 | 17,513 | ||||||
Cash surrender value of life insurance
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13,040 | 12,835 | 7,660 | ||||||
Accrued interest receivable and other assets
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19,833 | 21,957 | 23,182 | ||||||
Total assets
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$ | 1,035,089 | $ | 1,067,063 | $ | 1,072,967 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Non-interest bearing demand
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$ | 147,825 | $ | 136,878 | $ | 132,288 | |||
NOW, MMDA & Savings
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353,076 | 366,133 | 346,808 | ||||||
Time, $100,000 or more
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156,974 | 193,045 | 212,440 | ||||||
Other time
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122,671 | 131,055 | 138,874 | ||||||
Total deposits
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780,546 | 827,111 | 830,410 | ||||||
Demand notes payable to U.S. Treasury
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- | - | 1,252 | ||||||
Securities sold under agreement to repurchase
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50,510 | 39,600 | 44,512 | ||||||
FHLB borrowings
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70,000 | 70,000 | 70,000 | ||||||
Junior subordinated debentures
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20,619 | 20,619 | 20,619 | ||||||
Accrued interest payable and other liabilities
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18,574 | 6,706 | 5,641 | ||||||
Total liabilities
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940,249 | 964,036 | 972,434 | ||||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; issued and outstanding
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12,524 shares in 2012 and 25,054 shares in 2011
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12,298 | 24,758 | 24,687 | ||||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,544,160 shares in 2012 and 2011
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48,298 | 48,298 | 48,289 | ||||||
Retained earnings
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29,617 | 26,895 | 24,644 | ||||||
Accumulated other comprehensive income
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4,627 | 3,076 | 2,913 | ||||||
Total shareholders' equity
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94,840 | 103,027 | 100,533 | ||||||
Total liabilities and shareholders' equity
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$ | 1,035,089 | $ | 1,067,063 | $ | 1,072,967 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three and six months ended June 30, 2012 and 2011
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(Dollars in thousands, except per share amounts)
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Three months ended
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Six months ended
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June 30,
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June 30,
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2012
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2011
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2012
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2011
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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INTEREST INCOME:
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Interest and fees on loans
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$ | 8,227 | $ | 9,159 | $ | 16,652 | $ | 18,774 | |||
Interest on investment securities:
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U.S. Government sponsored enterprises
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737 | 1,413 | 1,807 | 2,494 | |||||||
State and political subdivisions
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787 | 790 | 1,587 | 1,595 | |||||||
Other
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84 | 60 | 151 | 116 | |||||||
Total interest income
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9,835 | 11,422 | 20,197 | 22,979 | |||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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295 | 601 | 639 | 1,319 | |||||||
Time deposits
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864 | 1,277 | 1,896 | 2,681 | |||||||
FHLB borrowings
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684 | 753 | 1,374 | 1,497 | |||||||
Junior subordinated debentures
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110 | 101 | 222 | 200 | |||||||
Other
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34 | 77 | 73 | 156 | |||||||
Total interest expense
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1,987 | 2,809 | 4,204 | 5,853 | |||||||
NET INTEREST INCOME
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7,848 | 8,613 | 15,993 | 17,126 | |||||||
PROVISION FOR LOAN LOSSES
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1,603 | 3,368 | 3,652 | 6,318 | |||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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6,245 | 5,245 | 12,341 | 10,808 | |||||||
NON-INTEREST INCOME:
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Service charges
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1,192 | 1,316 | 2,379 | 2,572 | |||||||
Other service charges and fees
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516 | 528 | 1,115 | 1,109 | |||||||
Gain on sale of securities
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664 | 181 | 1,191 | 1,256 | |||||||
Mortgage banking income
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271 | 218 | 497 | 405 | |||||||
Insurance and brokerage commissions
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119 | 121 | 254 | 229 | |||||||
Miscellaneous
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831 | 372 | 1,536 | 738 | |||||||
Total non-interest income
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3,593 | 2,736 | 6,972 | 6,309 | |||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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3,931 | 3,673 | 7,772 | 7,340 | |||||||
Occupancy
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1,300 | 1,331 | 2,600 | 2,696 | |||||||
Other
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2,612 | 2,404 | 4,742 | 4,742 | |||||||
Total non-interest expense
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7,843 | 7,408 | 15,114 | 14,778 | |||||||
EARNINGS BEFORE INCOME TAXES
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1,995 | 573 | 4,199 | 2,339 | |||||||
INCOME TAXES
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486 | (56 | ) | 1,031 | 349 | ||||||
NET EARNINGS
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1,509 | 629 | 3,168 | 1,990 | |||||||
Dividends and accretion on preferred stock
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348 | 348 | 697 | 697 | |||||||
NET EARNINGS AVAILABLE TO
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COMMON SHAREHOLDERS
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$ | 1,161 | $ | 281 | $ | 2,471 | $ | 1,293 | |||
PER COMMON SHARE AMOUNTS
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Basic net earnings
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$ | 0.21 | $ | 0.05 | $ | 0.45 | $ | 0.23 | |||
Diluted net earnings
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$ | 0.21 | $ | 0.05 | $ | 0.45 | $ | 0.23 | |||
Cash dividends
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$ | 0.02 | $ | 0.02 | $ | 0.09 | $ | 0.04 | |||
Book value
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$ | 14.89 | $ | 13.62 | $ | 14.89 | $ | 13.62 |
FINANCIAL HIGHLIGHTS
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For the three and six months ended June 30, 2012 and 2011
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(Dollars in thousands)
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Three months ended
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Six months ended
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June 30,
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June 30,
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2012
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2011
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2012
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2011
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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SELECTED AVERAGE BALANCES:
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Available for sale securities
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$ | 284,129 | $ | 285,223 | $ | 298,790 | $ | 276,273 | ||||
Loans
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654,343 | 704,366 | 662,962 | 712,994 | ||||||||
Earning assets
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972,963 | 1,012,214 | 985,405 | 1,011,638 | ||||||||
Assets
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1,036,560 | 1,068,988 | 1,047,985 | 1,067,654 | ||||||||
Deposits
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788,459 | 833,436 | 801,359 | 836,684 | ||||||||
Shareholders' equity
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106,671 | 98,705 | 106,691 | 98,415 | ||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.40% | 3.58% | 3.42% | 3.59% | ||||||||
Return on average assets
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0.59% | 0.24% | 0.61% | 0.38% | ||||||||
Return on average shareholders' equity
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5.69% | 2.52% | 5.97% | 4.08% | ||||||||
Shareholders' equity to total assets (period end)
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9.16% | 9.37% | 9.16% | 9.37% | ||||||||
ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 16,612 | $ | 15,410 | $ | 16,604 | $ | 15,493 | ||||
Provision for loan losses
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1,603 | 3,368 | 3,652 | 6,318 | ||||||||
Charge-offs
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(1,780 | ) | (2,966 | ) | (4,376 | ) | (6,311 | ) | ||||
Recoveries
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205 | 172 | 760 | 484 | ||||||||
Balance, end of period
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$ | 16,640 | $ | 15,984 | $ | 16,640 | $ | 15,984 | ||||
ASSET QUALITY:
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Non-accrual loans
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$ | 21,074 | $ | 30,997 | ||||||||
90 days past due and still accruing
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1,797 | 1,124 | ||||||||||
Other real estate owned
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6,505 | 7,115 | ||||||||||
Repossessed assets
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11 | - | ||||||||||
Total non-performing assets
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$ | 29,387 | $ | 39,236 | ||||||||
Non-performing assets to total assets
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2.84% | 3.66% | ||||||||||
Allowance for loan losses to non-performing assets
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56.62% | 40.74% | ||||||||||
Allowance for loan losses to total loans
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2.59% | 2.31% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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06/30/2012
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06/30/2011
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Risk Grade 1 (excellent quality)
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3.00%
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3.30%
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Risk Grade 2 (high quality)
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16.57%
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16.71%
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Risk Grade 3 (good quality)
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48.12%
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48.58%
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Risk Grade 4 (management attention)
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20.75%
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22.52%
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Risk Grade 5 (watch)
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4.29%
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2.05%
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Risk Grade 6 (substandard)
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6.91%
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6.55%
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Risk Grade 7 (low substandard)
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0.00%
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0.00%
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Risk Grade 8 (doubtful)
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0.00%
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0.00%
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Risk Grade 9 (loss)
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0.00%
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0.00%
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At June 30, 2012, including non-accrual loans, there were seven relationships exceeding $1.0 million (which totaled $12.7 million) in the Watch risk grade, six relationships exceeding $1.0 million in the Substandard risk grade (which totaled $14.8 million) and no relationships exceeding $1.0 million in the Low Substandard risk grade. There were four relationships with loans in the Watch risk grade and the Substandard risk grade exceeding $1.0 million total (which totaled $7.3 million).
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(END)
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