UNITED STATES SECURITIES AND EXCHANGE COMMISSION
|
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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: September 30, 2012
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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.)
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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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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.
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Yes
|
X |
No
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Yes
|
X |
No
|
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.
5,596,978 shares of common stock, outstanding at October 31, 2012.
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INDEX
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PART I.
|
FINANCIAL INFORMATION
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PAGE(S)
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||
Item 1.
|
Financial Statements
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|||
Consolidated Balance Sheets at September 30, 2012 (Unaudited) and
|
||||
December 31, 2011
|
3
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|||
Consolidated Statements of Earnings for the three and nine months ended
|
||||
September 30, 2012 and 2011 (Unaudited)
|
4
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|||
|
||||
Consolidated Statements of Comprehensive Income for the three and nine
|
||||
months ended September 30, 2012 and 2011 (Unaudited)
|
5
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Consolidated Statements of Cash Flows for the nine months ended
|
||||
September 30, 2012 and 2011 (Unaudited)
|
6-7
|
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Notes to Consolidated Financial Statements (Unaudited)
|
8-22
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Item 2.
|
Management's Discussion and Analysis of Financial Condition
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and Results of Operations
|
38
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Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
39
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||
Item 4T.
|
Controls and Procedures
|
40
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||
PART II.
|
OTHER INFORMATION
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Item 1.
|
Legal Proceedings
|
41
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||
Item 1A.
|
Risk Factors
|
41
|
||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
41
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||
Item 3.
|
Defaults upon Senior Securities
|
41
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||
Item 5.
|
Other Information
|
41
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Item 6.
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Exhibits
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41-44
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Signatures
|
45
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Certifications
|
46-48
|
PART I.
|
FINANCIAL INFORMATION
|
Item 1.
|
Financial Statements
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||||
Consolidated Balance Sheets
|
||||||
(Dollars in thousands)
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||||||
September 30,
|
December 31,
|
|||||
Assets
|
2012
|
2011
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||||
(Unaudited)
|
(Audited)
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|||||
Cash and due from banks, including reserve requirements
|
$ | 24,323 | 22,532 | |||
of $9,620 in 2012 and $8,492 in 2011
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Interest bearing deposits
|
31,581 | 6,704 | ||||
Cash and cash equivalents
|
55,904 | 29,236 | ||||
Investment securities available for sale
|
281,785 | 321,388 | ||||
Other investments
|
5,599 | 5,712 | ||||
Total securities
|
287,384 | 327,100 | ||||
Mortgage loans held for sale
|
5,984 | 5,146 | ||||
Loans
|
625,782 | 670,497 | ||||
Less allowance for loan losses
|
(16,551 | ) | (16,604 | ) | ||
Net loans
|
609,231 | 653,893 | ||||
Premises and equipment, net
|
16,091 | 16,896 | ||||
Cash surrender value of life insurance
|
13,142 | 12,835 | ||||
Other real estate
|
6,595 | 7,576 | ||||
Accrued interest receivable and other assets
|
12,277 | 14,381 | ||||
Total assets
|
$ | 1,006,608 | 1,067,063 | |||
Liabilities and Shareholders' Equity
|
||||||
Deposits:
|
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Non-interest bearing demand
|
$ | 152,281 | 136,878 | |||
NOW, MMDA & savings
|
354,386 | 366,133 | ||||
Time, $100,000 or more
|
143,189 | 193,045 | ||||
Other time
|
118,614 | 131,055 | ||||
Total deposits
|
768,470 | 827,111 | ||||
Securities sold under agreements to repurchase
|
43,136 | 39,600 | ||||
FHLB borrowings
|
70,000 | 70,000 | ||||
Junior subordinated debentures
|
20,619 | 20,619 | ||||
Accrued interest payable and other liabilities
|
7,549 | 6,706 | ||||
Total liabilities
|
909,774 | 964,036 | ||||
Commitments
|
||||||
Shareholders' equity:
|
||||||
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
|
12,524 | 24,758 | ||||
Common stock, no par value; authorized 20,000,000 shares;
|
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issued and outstanding 5,596,978 shares in 2012 and
|
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5,544,160 shares in 2011
|
48,004 | 48,298 | ||||
Retained earnings
|
30,815 | 26,895 | ||||
Accumulated other comprehensive income
|
5,491 | 3,076 | ||||
Total shareholders' equity
|
96,834 | 103,027 | ||||
Total liabilities and shareholders' equity
|
$ | 1,006,608 | 1,067,063 | |||
See accompanying Notes to Consolidated Financial Statements.
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|||||||||
Consolidated Statements of Earnings
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Three and Nine Months Ended September 30, 2012 and 2011
|
|||||||||
(Dollars in thousands, except per share amounts)
|
|||||||||
Three months ended
|
Nine months ended
|
||||||||
September 30,
|
September 30,
|
||||||||
2012
|
2011
|
2012
|
2011
|
||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||
Interest income:
|
|||||||||
Interest and fees on loans
|
$ | 8,170 | 8,921 | 24,822 | 27,695 | ||||
Interest on due from banks
|
15 | 4 | 34 | 19 | |||||
Interest on investment securities:
|
|||||||||
U.S. Government sponsored enterprises,
|
|||||||||
including mortgage-backed securities
|
519 | 1,504 | 2,327 | 3,998 | |||||
States and political subdivisions
|
877 | 792 | 2,463 | 2,387 | |||||
Other
|
74 | 70 | 206 | 171 | |||||
Total interest income
|
9,655 | 11,291 | 29,852 | 34,270 | |||||
Interest expense:
|
|||||||||
NOW, MMDA & savings deposits
|
274 | 517 | 913 | 1,836 | |||||
Time deposits
|
737 | 1,221 | 2,632 | 3,901 | |||||
FHLB borrowings
|
689 | 761 | 2,064 | 2,258 | |||||
Junior subordinated debentures
|
110 | 100 | 332 | 300 | |||||
Other
|
32 | 74 | 105 | 231 | |||||
Total interest expense
|
1,842 | 2,673 | 6,046 | 8,526 | |||||
Net interest income
|
7,813 | 8,618 | 23,806 | 25,744 | |||||
Provision for loan losses
|
761 | 3,378 | 4,413 | 9,696 | |||||
Net interest income after provision for loan losses
|
7,052 | 5,240 | 19,393 | 16,048 | |||||
Non-interest income:
|
|||||||||
Service charges
|
1,222 | 1,273 | 3,601 | 3,845 | |||||
Other service charges and fees
|
417 | 493 | 1,532 | 1,603 | |||||
Gain on sale of securities
|
12 | 1,239 | 1,203 | 2,495 | |||||
Mortgage banking income
|
296 | 127 | 793 | 531 | |||||
Insurance and brokerage commissions
|
150 | 121 | 404 | 350 | |||||
Loss on sale and write-down of
|
|||||||||
other real estate
|
(326 | ) | (318 | ) | (710 | ) | (1,026 | ) | |
Miscellaneous
|
1,115 | 787 | 3,035 | 2,233 | |||||
Total non-interest income
|
2,886 | 3,722 | 9,858 | 10,031 | |||||
Non-interest expense:
|
|||||||||
Salaries and employee benefits
|
4,187 | 3,489 | 11,960 | 10,829 | |||||
Occupancy
|
1,291 | 1,334 | 3,891 | 4,030 | |||||
Other
|
2,678 | 2,341 | 7,420 | 7,083 | |||||
Total non-interest expense
|
8,156 | 7,164 | 23,271 | 21,942 | |||||
Earnings before income taxes
|
1,782 | 1,798 | 5,980 | 4,137 | |||||
Income tax expense
|
369 | 406 | 1,400 | 755 | |||||
Net earnings
|
1,413 | 1,392 | 4,580 | 3,382 | |||||
Dividends and accretion on preferred stock
|
157 | 348 | 853 | 1,045 | |||||
Net earnings available to common shareholders
|
$ | 1,256 | 1,044 | 3,727 | 2,337 | ||||
Basic and diluted net earnings per common share
|
$ | 0.23 | 0.19 | 0.67 | 0.42 | ||||
Cash dividends declared per common share
|
$ | 0.02 | 0.02 | 0.11 | 0.04 | ||||
See accompanying Notes to Consolidated Financial Statements.
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|||||||||
Consolidated Statements of Comprehensive Income
|
|||||||||
Three and Nine Months Ended September 30, 2012 and 2011
|
|||||||||
(Dollars in thousands)
|
|||||||||
Three months ended
|
Nine months ended
|
||||||||
September 30,
|
September 30,
|
||||||||
2012
|
2011
|
2012
|
2011
|
||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||
Net earnings
|
$ | 1,413 | 1,392 | 4,580 | 3,382 | ||||
Other comprehensive income:
|
|||||||||
Unrealized holding gains on securities
|
|||||||||
available for sale
|
1,427 | 3,612 | 5,156 | 9,653 | |||||
Reclassification adjustment for gains on
|
|||||||||
securities available for sale
|
|||||||||
included in net earnings
|
(12 | ) | (1,239 | ) | (1,203 | ) | (2,495 | ) | |
Unrealized holding losses on derivative
|
|||||||||
financial instruments qualifying as cash flow
|
|||||||||
hedges
|
- | - | - | (648 | ) | ||||
Total other comprehensive income,
|
|||||||||
before income taxes
|
1,415 | 2,373 | 3,953 | 6,510 | |||||
Income tax expense related to other
|
|||||||||
comprehensive income:
|
|||||||||
Unrealized holding gains on securities
|
|||||||||
available for sale
|
555 | 1,407 | 2,008 | 3,760 | |||||
Reclassification adjustment for gains
|
|||||||||
on securities available for sale
|
|||||||||
included in net earnings
|
(4 | ) | (483 | ) | (470 | ) | (972 | ) | |
Unrealized holding losses on derivative
|
|||||||||
financial instruments qualifying as cash flow
|
|||||||||
hedges
|
- | - | - | (253 | ) | ||||
Total income tax expense related to
|
|||||||||
other comprehensive income
|
551 | 924 | 1,538 | 2,535 | |||||
Total other comprehensive income,
|
|||||||||
net of tax
|
864 | 1,449 | 2,415 | 3,975 | |||||
Total comprehensive income
|
$ | 2,277 | 2,841 | 6,995 | 7,357 | ||||
See accompanying Notes to Consolidated Financial Statements.
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|||||
Consolidated Statements of Cash Flows
|
|||||
Nine Months Ended September 30, 2012 and 2011
|
|||||
(Dollars in thousands)
|
|||||
2012
|
2011
|
||||
(Unaudited)
|
(Unaudited)
|
||||
Cash flows from operating activities:
|
|||||
Net earnings
|
$ | 4,580 | 3,382 | ||
Adjustments to reconcile net earnings to
|
|||||
net cash provided by operating activities:
|
|||||
Depreciation, amortization and accretion
|
6,651 | 3,915 | |||
Provision for loan losses
|
4,413 | 9,696 | |||
Gain on sale of investment securities
|
(1,203 | ) | (2,495 | ) | |
Loss on sale of other real estate
|
21 | 181 | |||
Write-down of other real estate
|
689 | 845 | |||
Restricted stock expense
|
17 | 5 | |||
Change in:
|
|||||
Mortgage loans held for sale
|
(838 | ) | 1,666 | ||
Cash surrender value of life insurance
|
(307 | ) | (182 | ) | |
Other assets
|
565 | 1,546 | |||
Other liabilities
|
826 | 438 | |||
Net cash provided by operating activities
|
15,414 | 18,997 | |||
Cash flows from investing activities:
|
|||||
Net change in certificates of deposit
|
- | 735 | |||
Purchases of investment securities available for sale
|
(55,617 | ) | (158,631 | ) | |
Proceeds from calls, maturities and paydowns of investment securities
|
|||||
available for sale
|
48,123 | 39,813 | |||
Proceeds from sales of investment securities available for sale
|
47,062 | 72,292 | |||
Purchases of other investments
|
(493 | ) | (215 | ) | |
Proceeds from sale of other investments
|
606 | 197 | |||
Net change in loans
|
35,910 | 36,659 | |||
Purchases of premises and equipment
|
(657 | ) | (775 | ) | |
Purchases of bank owned life insurance
|
- | (5,000 | ) | ||
Proceeds from sale of other real estate
|
4,611 | 2,656 | |||
Net cash provided (used) by investing activities
|
79,545 | (12,269 | ) | ||
Cash flows from financing activities:
|
|||||
Net change in deposits
|
(58,641 | ) | 2,329 | ||
Net change in demand notes payable to U.S. Treasury
|
- | (504 | ) | ||
Net change in securities sold under agreement to repurchase
|
3,536 | 13,607 | |||
Proceeds from FHLB borrowings
|
25,400 | 5,000 | |||
Repayments of FHLB borrowings
|
(25,400 | ) | (5,000 | ) | |
Preferred stock repurchase
|
(11,695 | ) | - | ||
Warrant repurchase | (425 | ) | - | ||
Restricted stock payout
|
- | 9 | |||
Stock options exercised
|
410 | - | |||
Cash dividends paid on preferred stock
|
(866 | ) | (940 | ) | |
Cash dividends paid on common stock
|
(610 | ) | (333 | ) | |
Net cash (used) provided by financing activities
|
(68,291 | ) | 14,168 | ||
Net change in cash and cash equivalent
|
26,668 | 20,896 | |||
Cash and cash equivalents at beginning of period
|
29,236 | 23,977 | |||
Cash and cash equivalents at end of period
|
$ | 55,904 | 44,873 |
PEOPLES BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|||||
Consolidated Statements of Cash Flows, continued
|
|||||
Nine Months Ended September 30, 2012 and 2011
|
|||||
(Dollars in thousands)
|
|||||
2012
|
2011
|
||||
(Unaudited)
|
(Unaudited)
|
||||
Supplemental disclosures of cash flow information:
|
|||||
Cash paid during the year for:
|
|||||
Interest
|
$ | 6,609 | 8,613 | ||
Income taxes
|
$ | 1,190 | 132 | ||
Noncash investing and financing activities:
|
|||||
Change in unrealized gain on investment securities
|
|||||
available for sale, net
|
$ | 2,414 | (4,370 | ) | |
Change in unrealized gain on derivative financial
|
|||||
instruments, net
|
$ | - | 395 | ||
Transfer of loans to other real estate and repossessions
|
$ | 4,669 | 7,041 | ||
Financed portion of sale of other real estate
|
$ | 330 | 4,047 | ||
Accretion of Series A preferred stock
|
$ | 70 | 106 | ||
Discount on preferred stock | $ | 835 | - | ||
See accompanying Notes to Consolidated Financial Statements.
|
(1)
|
Summary of Significant Accounting Policies
|
(2)
|
Investment Securities
|
(Dollars in thousands)
|
||||||||
September 30, 2012
|
||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated Fair
Value
|
|||||
Mortgage-backed securities
|
$ | 158,548 | 1,982 | 444 | 160,086 | |||
U.S. Government
|
||||||||
sponsored enterprises
|
1,254 | 40 | - | 1,294 | ||||
State and political subdivisions
|
109,456 | 6,739 | 46 | 116,149 | ||||
Corporate bonds
|
1,535 | 16 | - | 1,551 | ||||
Trust preferred securities
|
1,250 | - | - | 1,250 | ||||
Equity securities
|
748 | 707 | - | 1,455 | ||||
Total
|
$ | 272,791 | 9,484 | 490 | 281,785 | |||
(Dollars in thousands)
|
||||||||
December 31, 2011
|
||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated Fair
Value
|
|||||
Mortgage-backed securities
|
$ | 213,378 | 1,371 | 1,056 | 213,693 | |||
U.S. Government
|
||||||||
sponsored enterprises
|
7,429 | 265 | - | 7,694 | ||||
State and political subdivisions
|
92,996 | 4,157 | 56 | 97,097 | ||||
Corporate bonds
|
546 | - | 3 | 543 | ||||
Trust preferred securities
|
1,250 | - | - | 1,250 | ||||
Equity securities
|
748 | 363 | - | 1,111 | ||||
Total
|
$ | 316,347 | 6,156 | 1,115 | 321,388 |
(Dollars in thousands)
|
||||||||||||
September 30, 2012
|
||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||
Mortgage-backed securities
|
$ | 38,125 | 379 | 5,750 | 65 | 43,875 | 444 | |||||
State and political subdivisions
|
4,406 | 46 | - | - | 4,406 | 46 | ||||||
Total
|
$ | 42,531 | 425 | 5,750 | 65 | 48,281 | 490 | |||||
(Dollars in thousands)
|
||||||||||||
December 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
|
$ | 95,122 | 991 | 4,125 | 65 | 99,247 | 1,056 | |||||
State and political subdivisions
|
4,444 | 56 | - | - | 4,444 | 56 | ||||||
Corporate bonds
|
542 | 3 | - | - | 542 | 3 | ||||||
Total
|
$ | 100,108 | 1,050 | 4,125 | 65 | 104,233 | 1,115 |
(Dollars in thousands)
|
||||
Amortized
Cost
|
Estimated Fair
Value
|
|||
Due within one year
|
$ | 3,611 | 3,653 | |
Due from one to five years
|
12,117 | 12,581 | ||
Due from five to ten years
|
84,014 | 89,146 | ||
Due after ten years
|
13,753 | 14,864 | ||
Mortgage-backed securities
|
158,548 | 160,086 | ||
Equity securities
|
748 | 1,455 | ||
Total
|
$ | 272,791 | 281,785 |
(3)
|
Loans
|
(Dollars in thousands)
|
||||
September 30, 2012
|
December 31, 2011
|
|||
Real estate loans
|
||||
Construction and land development
|
$ | 80,733 | 93,812 | |
Single-family residential
|
249,167 | 267,051 | ||
Commercial
|
203,603 | 214,415 | ||
Multifamily and farmland
|
4,964 | 4,793 | ||
Total real estate loans
|
538,467 | 580,071 | ||
Commercial loans (not secured by real estate)
|
60,358 | 60,646 | ||
Farm loans (not secured by real estate)
|
12 | - | ||
Consumer loans (not secured by real estate)
|
10,303 | 10,490 | ||
All other loans (not secured by real estate)
|
16,642 | 19,290 | ||
Total loans
|
625,782 | 670,497 | ||
Less allowance for loan losses
|
16,551 | 16,604 | ||
Total net loans
|
$ | 609,231 | 653,893 |
September 30, 2012
|
||||||||||||
(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
|
$ | 1,513 | 1,846 | 3,359 | 77,374 | 80,733 | - | |||||
Single-family residential
|
8,145 | 4,758 | 12,903 | 236,264 | 249,167 | 2,396 | ||||||
Commercial
|
743 | 2,492 | 3,235 | 200,368 | 203,603 | - | ||||||
Multifamily and farmland
|
209 | - | 209 | 4,755 | 4,964 | - | ||||||
Total real estate loans
|
10,610 | 9,096 | 19,706 | 518,761 | 538,467 | 2,396 | ||||||
Commercial loans (not secured by real estate)
|
854 | 18 | 872 | 59,486 | 60,358 | - | ||||||
Farm loans (not secured by real estate)
|
- | - | - | 12 | 12 | - | ||||||
Consumer loans (not secured by real estate)
|
119 | 5 | 124 | 10,179 | 10,303 | 2 | ||||||
All other loans (not secured by real estate)
|
- | - | - | 16,642 | 16,642 | - | ||||||
Total loans
|
$ | 11,583 | 9,119 | 20,702 | 605,080 | 625,782 | 2,398 |
December 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
|
$ | 10,033 | 3,338 | 13,371 | 80,441 | 93,812 | - | |||||
Single-family residential
|
16,536 | 6,189 | 22,725 | 244,326 | 267,051 | 2,709 | ||||||
Commercial
|
1,002 | 958 | 1,960 | 212,455 | 214,415 | - | ||||||
Multifamily and farmland
|
13 | - | 13 | 4,780 | 4,793 | - | ||||||
Total real estate loans
|
27,584 | 10,485 | 38,069 | 542,002 | 580,071 | 2,709 | ||||||
Commercial loans (not secured by real estate)
|
576 | 9 | 585 | 60,061 | 60,646 | - | ||||||
Consumer loans (not secured by real estate)
|
116 | 36 | 152 | 10,338 | 10,490 | - | ||||||
All other loans (not secured by real estate)
|
- | - | - | 19,290 | 19,290 | - | ||||||
Total loans
|
$ | 28,276 | 10,530 | 38,806 | 631,691 | 670,497 | 2,709 |
(Dollars in thousands)
|
||||
September 30, 2012
|
December 31, 2011
|
|||
Real estate loans
|
||||
Construction and land development
|
$ | 10,866 | 13,257 | |
Single-family residential
|
4,255 | 5,522 | ||
Commercial
|
3,239 | 2,451 | ||
Total real estate loans
|
18,360 | 21,230 | ||
Commercial loans (not secured by real estate)
|
457 | 403 | ||
Consumer loans (not secured by real estate)
|
22 | 152 | ||
Total
|
$ | 18,839 | 21,785 |
September 30, 2012
|
||||||||||||
(Dollars in thousands)
|
||||||||||||
Unpaid Contractual Principal
Balance
|
Recorded Investment
With No Allowance
|
Recorded Investment
With
Allowance
|
Recorded Investment
in Impaired
Loans
|
Related
Allowance
|
Average Outstanding Impaired
Loans
|
|||||||
Real estate loans
|
||||||||||||
Construction and land development
|
$ | 28,090 | 12,832 | 7,437 | 20,269 | 1,821 | 13,806 | |||||
Single-family residential
|
29,652 | 5,193 | 23,416 | 28,609 | 1,343 | 28,620 | ||||||
Commercial
|
7,903 | 6,953 | 317 | 7,270 | 114 | 5,565 | ||||||
Multifamily and farmland
|
200 | 200 | - | 200 | - | 201 | ||||||
Total impaired real estate loans
|
65,845 | 25,178 | 31,170 | 56,348 | 3,278 | 48,192 | ||||||
Commercial loans (not secured by real estate)
|
1,155 | 1,117 | - | 1,117 | - | 1,187 | ||||||
Consumer loans (not secured by real estate)
|
- | 30 | - | 30 | - | 38 | ||||||
Total impaired loans
|
$ | 67,000 | 26,325 | 31,170 | 57,495 | 3,278 | 49,417 |
December 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 Outstanding Impaired
Loans
|
|||||||
Real estate loans
|
||||||||||||
Construction and land development
|
$ | 28,721 | 14,484 | 6,098 | 20,582 | 3,264 | 17,848 | |||||
Single-family residential
|
26,382 | 969 | 24,719 | 25,688 | 1,427 | 25,102 | ||||||
Commercial
|
7,717 | 3,845 | 3,139 | 6,984 | 77 | 4,518 | ||||||
Multifamily and farmland
|
209 | - | 209 | 209 | 1 | 214 | ||||||
Total impaired real estate loans
|
63,029 | 19,298 | 34,165 | 53,463 | 4,769 | 47,682 | ||||||
Commercial loans (not secured by real estate)
|
1,111 | - | 1,083 | 1,083 | 26 | 1,485 | ||||||
Consumer loans (not secured by real estate)
|
157 | - | 152 | 152 | 2 | 140 | ||||||
Total impaired loans
|
$ | 64,297 | 19,298 | 35,400 | 54,698 | 4,797 | 49,307 |
Nine months ended September 30, 2012
|
|||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Real Estate Loans
|
|||||||||||||||||||
Construction and Land Development
|
Single-
Family Residential
|
Commercial
|
Multifamily and
Farmland
|
Commercial
|
Farm
|
Consumer
and All
Other
|
Unallocated
|
Total
|
|||||||||||
Allowance for loan losses:
|
|||||||||||||||||||
Beginning balance
|
$ | 7,182 | 5,357 | 1,731 | 13 | 1,029 | - | 255 | 1,037 | 16,604 | |||||||||
Charge-offs
|
(3,045 | ) | (1,149 | ) | (547 | ) | - | (498 | ) | - | (403 | ) | - | (5,642 | ) | ||||
Recoveries
|
522 | 71 | 374 | - | 95 | - | 115 | - | 1,177 | ||||||||||
Provision
|
1,733 | 817 | (21 | ) | - | (18 | ) | - | 222 | 1,679 | 4,412 | ||||||||
Ending balance
|
$ | 6,392 | 5,096 | 1,537 | 13 | 608 | - | 189 | 2,716 | 16,551 | |||||||||
Ending balance: individually
|
|||||||||||||||||||
evaluated for impairment
|
$ | 1,527 | 1,637 | 114 | - | - | - | - | - | 3,278 | |||||||||
Ending balance: collectively
|
|||||||||||||||||||
evaluated for impairment
|
4,865 | 3,459 | 1,423 | 13 | 608 | - | 189 | 2,716 | 13,273 | ||||||||||
Ending balance
|
$ | 6,392 | 5,096 | 1,537 | 13 | 608 | - | 189 | 2,716 | 16,551 | |||||||||
Loans:
|
|||||||||||||||||||
Ending balance
|
$ | 80,733 | 249,167 | 203,603 | 4,964 | 60,358 | 12 | 26,945 | - | 625,782 | |||||||||
Ending balance: individually
|
|||||||||||||||||||
evaluated for impairment
|
$ | 19,734 | 23,770 | 6,798 | - | 346 | - | - | - | 50,648 | |||||||||
Ending balance: collectively
|
|||||||||||||||||||
evaluated for impairment
|
$ | 60,999 | 225,397 | 196,805 | 4,964 | 60,012 | 12 | 26,945 | - | 575,134 |
Year ended December 31, 2011
|
|||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Real Estate Loans
|
|||||||||||||||||
Construction
and Land Development
|
Single-
Family
Residential
|
Commercial
|
Multifamily
and
Farmland
|
Commercial
|
Consumer
and All
Other
|
Unallocated
|
Total
|
||||||||||
Allowance for loan losses:
|
|||||||||||||||||
Beginning balance
|
$ | 5,774 | 6,097 | 1,409 | 17 | 1,174 | 430 | 592 | 15,493 | ||||||||
Charge-offs
|
(7,164 | ) | (2,925 | ) | (1,271 | ) | - | (314 | ) | (586 | ) | - | (12,260 | ) | |||
Recoveries
|
241 | 201 | 24 | - | 121 | 152 | - | 739 | |||||||||
Provision
|
8,331 | 1,984 | 1,569 | (4 | ) | 48 | 259 | 445 | 12,632 | ||||||||
Ending balance
|
$ | 7,182 | 5,357 | 1,731 | 13 | 1,029 | 255 | 1,037 | 16,604 | ||||||||
Ending balance: individually
|
|||||||||||||||||
evaluated for impairment
|
$ | 1,250 | 1,289 | - | - | - | - | - | 2,539 | ||||||||
Ending balance: collectively
|
|||||||||||||||||
evaluated for impairment
|
5,932 | 4,068 | 1,731 | 13 | 1,029 | 255 | 1,037 | 14,065 | |||||||||
Ending balance
|
$ | 7,182 | 5,357 | 1,731 | 13 | 1,029 | 255 | 1,037 | 16,604 | ||||||||
Loans:
|
|||||||||||||||||
Ending balance
|
$ | 93,812 | 267,051 | 214,415 | 4,793 | 60,646 | 29,780 | - | 670,497 | ||||||||
Ending balance: individually
|
|||||||||||||||||
evaluated for impairment
|
$ | 20,280 | 20,661 | 3,845 | - | - | - | - | 44,786 | ||||||||
Ending balance: collectively
|
|||||||||||||||||
evaluated for impairment
|
$ | 73,532 | 246,390 | 210,570 | 4,793 | 60,646 | 29,780 | - | 625,711 |
·
|
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 higher risk and servicing needs but still are acceptable. Evidence of marginal performance or deteriorating trends is observed. 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 has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Company’s position at some future date.
|
·
|
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 as 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 as 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.
|
September 30, 2012
|
||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||
Real Estate Loans
|
||||||||||||||||||
Construction
and Land Development
|
Single-
Family Residential
|
Commercial
|
Multifamily and
Farmland
|
Commercial
|
Farm
|
Consumer
|
All Other
|
Total
|
||||||||||
1- Excellent Quality
|
$ | 192 | 23,029 | - | - | 954 | - | 1,350 | - | 25,525 | ||||||||
2- High Quality
|
5,132 | 58,651 | 24,297 | 36 | 9,737 | - | 4,213 | 2,376 | 104,442 | |||||||||
3- Good Quality
|
23,443 | 88,980 | 116,735 | 2,647 | 36,287 | 12 | 4,226 | 14,261 | 286,591 | |||||||||
4- Management Attention
|
24,565 | 48,969 | 49,292 | 1,364 | 12,103 | - | 388 | 5 | 136,686 | |||||||||
5- Watch
|
8,177 | 11,249 | 8,609 | 717 | 351 | - | 89 | - | 29,192 | |||||||||
6- Substandard
|
19,224 | 18,289 | 4,670 | 200 | 926 | - | 37 | - | 43,346 | |||||||||
7- Low Substandard
|
- | - | - | - | - | - | - | - | - | |||||||||
8- Doubtful
|
- | - | - | - | - | - | - | - | - | |||||||||
9- Loss
|
- | - | - | - | - | - | - | - | - | |||||||||
Total
|
$ | 80,733 | 249,167 | 203,603 | 4,964 | 60,358 | 12 | 10,303 | 16,642 | 625,782 |
December 31, 2011
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Real Estate Loans
|
||||||||||||||||
Construction
and Land Development
|
Single-
Family Residential
|
Commercial
|
Multifamily
and
Farmland
|
Commercial
|
Consumer
|
All Other
|
Total
|
|||||||||
1- Excellent Quality
|
$ | 197 | 25,474 | - | - | 715 | 1,344 | - | 27,730 | |||||||
2- High Quality
|
5,183 | 64,817 | 25,506 | 50 | 8,801 | 4,070 | 2,774 | 111,201 | ||||||||
3- Good Quality
|
27,675 | 100,388 | 136,137 | 3,448 | 36,585 | 4,259 | 16,509 | 325,001 | ||||||||
4- Management Attention
|
28,138 | 50,253 | 40,312 | 358 | 12,882 | 429 | 7 | 132,379 | ||||||||
5- Watch
|
15,923 | 11,767 | 2,795 | 728 | 622 | 89 | - | 31,924 | ||||||||
6- Substandard
|
16,696 | 14,352 | 9,665 | 209 | 1,041 | 154 | - | 42,117 | ||||||||
7- Low Substandard
|
- | - | - | - | - | - | - | - | ||||||||
8- Doubtful
|
- | - | - | - | - | - | - | - | ||||||||
9- Loss
|
- | - | - | - | - | 145 | - | 145 | ||||||||
Total
|
$ | 93,812 | 267,051 | 214,415 | 4,793 | 60,646 | 10,490 | 19,290 | 670,497 |
September 30, 2012
|
||||||
(Dollars in thousands)
|
||||||
Number of Contracts
|
Pre-Modification Outstanding
Recorded
Investment
|
Post-Modification Outstanding
Recorded
Investment
|
||||
Real estate loans
|
||||||
Construction and land development
|
20 | $ | 16,735 | 9,824 | ||
Single-family residential
|
97 | 10,965 | 10,118 | |||
Commercial
|
5 | 3,136 | 981 | |||
Multifamily and Farmland
|
1 | 322 | 200 | |||
Total real estate TDR loans
|
123 | 31,158 | 21,123 | |||
Commercial loans (not secured by real estate)
|
14 | 1,271 | 706 | |||
Consumer loans (not secured by real estate)
|
1 | 2 | 6 | |||
Total TDR loans
|
138 | $ | 32,431 | 21,835 |
December 31, 2011
|
||||||
(Dollars in thousands)
|
||||||
Number of Contracts
|
Pre-Modification Outstanding
Recorded
Investment
|
Post-Modification Outstanding
Recorded
Investment
|
||||
Real estate loans
|
||||||
Construction and land development
|
29 | $ | 19,762 | 12,840 | ||
Single-family residential
|
241 | 25,541 | 24,846 | |||
Commercial
|
15 | 7,200 | 5,013 | |||
Multifamily and Farmland
|
1 | 322 | 209 | |||
Total real estate TDR loans
|
286 | 52,825 | 42,908 | |||
Commercial loans (not secured by real estate)
|
21 | 1,711 | 1,083 | |||
Consumer loans (not secured by real estate)
|
8 | 124 | 142 | |||
Total TDR loans
|
315 | $ | 54,660 | 44,133 |
(4)
|
Net Earnings Per Common Share
|
For the three months ended September 30, 2012
|
|||||||
Net Earnings Available to
Common
Shareholders
(Dollars in
thousands)
|
Common Shares
|
Per Share Amount
|
|||||
Basic earnings per common share
|
$ | 1,256 | 5,559,016 | $ | 0.23 | ||
Effect of dilutive securities:
|
|||||||
Stock options
|
- | 2,570 | |||||
Diluted earnings per common share
|
$ | 1,256 | 5,561,586 | $ | 0.23 |
For the nine months ended September 30, 2012
|
|||||||
Net Earnings Available to
Common
Shareholders
(Dollars in
thousands)
|
Common Shares
|
Per Share Amount
|
|||||
Basic earnings per common share
|
$ | 3,727 | 5,549,148 | $ | 0.67 | ||
Effect of dilutive securities:
|
|||||||
Stock options
|
- | 2,168 | |||||
Diluted earnings per common share
|
$ | 3,727 | 5,551,316 | $ | 0.67 |
For the three months ended September 30, 2011
|
|||||||
Net Earnings Available to
Common
Shareholders
(Dollars in
thousands)
|
Common Shares
|
Per Share Amount
|
|||||
Basic earnings per common share
|
$ | 1,044 | 5,542,703 | $ | 0.19 | ||
Effect of dilutive securities:
|
|||||||
Stock options
|
- | 1,922 | |||||
Diluted earnings per common share
|
$ | 1,044 | 5,544,625 | $ | 0.19 |
For the nine months ended September 30, 2011
|
|||||||
Net Earnings Available to
Common
Shareholders
(Dollars in
thousands)
|
Common Shares
|
Per Share Amount
|
|||||
Basic earnings per common share
|
$ | 2,337 | 5,542,126 | $ | 0.42 | ||
Effect of dilutive securities:
|
|||||||
Stock options
|
- | 1,739 | |||||
Diluted earnings per common share
|
$ | 2,337 | 5,543,865 | $ | 0.42 |
(5)
|
Stock-Based Compensation
|
(6)
|
Fair Value
|
·
|
Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.
|
·
|
Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
·
|
Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
|
(Dollars in thousands)
|
||||||||
September 30, 2012
|
||||||||
Fair Value Measurements
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
|||||
Mortgage-backed securities
|
$ | 160,086 | - | 160,086 | - | |||
U.S. Government
|
||||||||
sponsored enterprises
|
$ | 1,294 | - | 1,294 | - | |||
State and political subdivisions
|
$ | 116,149 | - | 116,149 | - | |||
Corporate bonds
|
$ | 1,551 | - | 1,551 | - | |||
Trust preferred securities
|
$ | 1,250 | - | - | 1,250 | |||
Equity securities
|
$ | 1,455 | 1,455 | - | - | |||
Mortgage loans held for sale
|
$ | 5,984 | - | - | 5,984 |
(Dollars in thousands)
|
||||||||
December 31, 2011
|
||||||||
Fair Value Measurements
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
|||||
Mortgage-backed securities
|
$ | 213,693 | - | 208,349 | 5,344 | |||
U.S. Government
|
||||||||
sponsored enterprises
|
$ | 7,694 | - | 7,694 | - | |||
State and political subdivisions
|
$ | 97,097 | - | 97,097 | - | |||
Corporate bonds
|
$ | 543 | - | 543 | - | |||
Trust preferred securities
|
$ | 1,250 | - | - | 1,250 | |||
Equity securities
|
$ | 1,111 | 1,111 | - | - | |||
Mortgage loans held for sale
|
$ | 5,146 | - | - | 5,146 |
(Dollars in thousands)
|
|||
Investment Securities Available for Sale
|
|||
Level 3 Valuation
|
|||
Balance, beginning of period
|
$ | 6,594 | |
Change in book value
|
- | ||
Change in gain/(loss) realized and unrealized
|
- | ||
Purchases/(sales)
|
- | ||
Transfers in and/or (out) of Level 3
|
(5,344 | ) | |
Balance, end of period
|
$ | 1,250 | |
Change in unrealized gain/(loss) for assets still held in Level 3
|
$ | - |
(Dollars in thousands)
|
|||||||||||
Fair Value
Measurements
September 30, 2012
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
Total Gains/(Losses) for
the Nine Months Ended September 30, 2012
|
|||||||
Impaired loans
|
$ | 57,495 | - | - | 57,495 | (5,408 | ) | ||||
Other real estate
|
$ | 6,595 | - | - | 6,595 | (710 | ) |
(Dollars in thousands)
|
|||||||||||
Fair Value
Measurements
December 31, 2011
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
Total Gains/(Losses) for
the Year Ended
December 31, 2011
|
|||||||
Impaired loans
|
$ | 49,901 | - | 431 | 49,470 | (11,864 | ) | ||||
Other real estate
|
$ | 7,576 | - | - | 7,576 | (1,322 | ) |
(Dollars in thousands)
|
||||||||||
Fair Value Measurements at September 30, 2012
|
||||||||||
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||
Assets:
|
||||||||||
Cash and cash equivalents
|
$ | 55,904 | 55,904 | - | - | 55,904 | ||||
Investment securities available for sale
|
281,785 | 1,455 | 279,080 | 1,250 | 281,785 | |||||
Other investments
|
5,599 | - | - | 5,599 | 5,599 | |||||
Mortgage loans held for sale
|
5,984 | - | - | 5,984 | 5,984 | |||||
Loans, net
|
609,231 | - | - | 604,690 | 604,690 | |||||
Cash surrender value of life insurance
|
13,142 | - | 13,142 | - | 13,142 | |||||
Liabilities:
|
||||||||||
Deposits
|
$ | 768,470 | - | 767,543 | - | 767,543 | ||||
Securities sold under agreements
|
||||||||||
to repurchase
|
43,136 | - | 43,136 | - | 43,136 | |||||
FHLB borrowings
|
70,000 | - | 75,938 | - | 75,938 | |||||
Junior subordinated debentures
|
20,619 | - | 20,619 | - | 20,619 |
(Dollars in thousands)
|
||||
December 31, 2011
|
||||
Carrying
Amount
|
Estimated
Fair Value
|
|||
Assets:
|
||||
Cash and cash equivalents
|
$ | 29,236 | 29,236 | |
Investment securities available for sale
|
321,388 | 321,388 | ||
Other investments
|
5,712 | 5,712 | ||
Mortgage loans held for sale
|
5,146 | 5,146 | ||
Loans, net
|
653,893 | 648,640 | ||
Cash surrender value of life insurance
|
12,835 | 12,835 | ||
Liabilities:
|
||||
Deposits and demand notes payable
|
$ | 827,111 | 826,810 | |
Securities sold under agreements
|
||||
to repurchase
|
39,600 | 39,600 | ||
FHLB borrowings
|
70,000 | 75,046 | ||
Junior subordinated debentures
|
20,619 | 20,619 |
(7)
|
Derivative Instruments and Hedging Activities
|
(Dollars in thousands)
|
|||||||||||||
Amount of Gain
|
Location of Gain
|
Amount of Gain
|
|||||||||||
(Loss) Recognized in
|
(Loss) Reclassified
|
(Loss) Reclassified
|
|||||||||||
Accumulated OCI on
|
from Accumulated
|
from Accumulated
|
|||||||||||
Derivatives
|
OCI into Income
|
OCI into Income
|
|||||||||||
Nine months ended
|
Nine months ended
|
||||||||||||
September 30,
|
September 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
Interest rate derivative contracts
|
$ |
-
|
|
$ |
(20)
|
Interest income
|
$ |
-
|
$
|
628
|
(8)
|
TARP Repurchase
|
(Dollars in thousands)
|
|||||||||||||
Amount of Gain
|
Location of Gain
|
Amount of Gain
|
|||||||||||
(Loss) Recognized in
|
(Loss) Reclassified
|
(Loss) Reclassified
|
|||||||||||
Accumulated OCI on
|
from Accumulated
|
from Accumulated
|
|||||||||||
Derivatives
|
OCI into Income
|
OCI into Income
|
|||||||||||
Nine months ended
|
Nine months ended
|
||||||||||||
September 30,
|
September 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
Interest rate derivative contracts
|
$ |
-
|
|
$
|
(20)
|
Interest income
|
$ |
-
|
|
$
|
628
|
(Dollars in thousands)
|
||||||||
September 30, 2012
|
||||||||
Fair Value Measurements
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
|||||
Mortgage-backed securities
|
$ | 160,086 | - | 160,086 | - | |||
U.S. Government
|
||||||||
sponsored enterprises
|
$ | 1,294 | - | 1,294 | - | |||
State and political subdivisions
|
$ | 116,149 | - | 116,149 | - | |||
Corporate bonds
|
$ | 1,551 | - | 1,551 | - | |||
Trust preferred securities
|
$ | 1,250 | - | - | 1,250 | |||
Equity securities
|
$ | 1,455 | 1,455 | - | - | |||
Mortgage loans held for sale
|
$ | 5,984 | - | - | 5,984 |
(Dollars in thousands)
|
||||||||
December 31, 2011
|
||||||||
Fair Value Measurements
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
|||||
Mortgage-backed securities
|
$ | 213,693 | - | 208,349 | 5,344 | |||
U.S. Government
|
||||||||
sponsored enterprises
|
$ | 7,694 | - | 7,694 | - | |||
State and political subdivisions
|
$ | 97,097 | - | 97,097 | - | |||
Corporate bonds
|
$ | 543 | - | 543 | - | |||
Trust preferred securities
|
$ | 1,250 | - | - | 1,250 | |||
Equity securities
|
$ | 1,111 | 1,111 | - | - | |||
Mortgage loans held for sale
|
$ | 5,146 | - | - | 5,146 |
(Dollars in thousands)
|
|||
Investment Securities Available for Sale
|
|||
Level 3 Valuation
|
|||
Balance, beginning of period
|
$ | 6,594 | |
Change in book value
|
- | ||
Change in gain/(loss) realized and unrealized
|
- | ||
Purchases/(sales)
|
- | ||
Transfers in and/or (out) of Level 3
|
(5,344 | ) | |
Balance, end of period
|
$ | 1,250 | |
Change in unrealized gain/(loss) for assets still held in Level 3
|
$ | - |
(Dollars in thousands)
|
|||||||||||
Fair Value
Measurements
September 30, 2012
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
Total Gains/(Losses) for
the Nine Months Ended September 30, 2012
|
|||||||
Impaired loans
|
$ | 57,495 | - | - | 57,495 | (5,408 | ) | ||||
Other real estate
|
$ | 6,595 | - | - | 6,595 | (710 | ) |
(Dollars in thousands)
|
|||||||||||
Fair Value
Measurements
December 31, 2011
|
Level 1
Valuation
|
Level 2
Valuation
|
Level 3
Valuation
|
Total Gains/(Losses) for
the Year Ended
December 31, 2011
|
|||||||
Impaired loans
|
$ | 49,901 | - | 431 | 49,470 | (11,864 | ) | ||||
Other real estate
|
$ | 7,576 | - | - | 7,576 | (1,322 | ) |
Three months ended
|
Three months ended
|
|||||||||||||
September 30, 2012
|
September 30, 2011
|
|||||||||||||
(Dollars in thousands)
|
Average
Balance
|
Interest
|
Yield /
Rate
|
Average
Balance
|
Interest
|
Yield /
Rate
|
||||||||
Interest-earning assets:
|
||||||||||||||
Interest and fees on loans
|
$ | 639,402 | 8,170 | 5.08% | 687,086 | 8,921 | 5.15% | |||||||
Investments - taxable
|
175,697 | 575 | 1.30% | 185,974 | 1,338 | 2.85% | ||||||||
Investments - nontaxable*
|
109,459 | 1,320 | 4.80% | 134,530 | 1,451 | 4.28% | ||||||||
Other
|
25,978 | 15 | 0.23% | 8,471 | 4 | 0.21% | ||||||||
Total interest-earning assets
|
950,536 | 10,080 | 4.22% | 1,016,061 | 11,714 | 4.57% | ||||||||
Cash and due from banks
|
25,485 | 24,003 | ||||||||||||
Other assets
|
55,224 | 51,201 | ||||||||||||
Allowance for loan losses
|
(16,911 | ) | (16,192 | ) | ||||||||||
Total assets
|
$ | 1,014,334 | 1,075,073 | |||||||||||
Interest-bearing liabilities:
|
||||||||||||||
NOW, MMDA & savings deposits
|
$ | 348,680 | 274 | 0.31% | 347,278 | 517 | 0.59% | |||||||
Time deposits
|
269,369 | 737 | 1.09% | 347,187 | 1,221 | 1.39% | ||||||||
FHLB / FRB borrowings
|
70,000 | 689 | 3.92% | 70,000 | 761 | 4.31% | ||||||||
Trust preferred securities
|
20,619 | 110 | 2.12% | 20,619 | 100 | 1.92% | ||||||||
Other
|
49,320 | 32 | 0.26% | 47,909 | 74 | 0.62% | ||||||||
Total interest-bearing liabilities
|
757,988 | 1,842 | 0.97% | 832,993 | 2,673 | 1.27% | ||||||||
Demand deposits
|
154,434 | 135,835 | ||||||||||||
Other liabilities
|
5,427 | 4,317 | ||||||||||||
Shareholders' equity
|
96,940 | 101,937 | ||||||||||||
Total liabilities and shareholder's equity
|
$ | 1,014,789 | 1,075,082 | |||||||||||
Net interest spread
|
$ | 8,238 | 3.25% | 9,041 | 3.30% | |||||||||
Net yield on interest-earning assets
|
3.45% | 3.53% | ||||||||||||
Taxable equivalent adjustment
|
||||||||||||||
Investment securities
|
$ | 425 | 423 | |||||||||||
Net interest income
|
$ | 7,813 | 8,618 | |||||||||||
*Includes U.S. Government agency securities that are non-taxable for state income tax purposes of $2.7 million in 2012 and $45.1 million in 2011. An effective tax rate of 6.90% was used to calculate the tax equivalent yield on these securities.
|
Nine months ended
|
Nine months ended
|
||||||||||||||
September 30, 2012
|
September 30, 2011
|
||||||||||||||
(Dollars in thousands)
|
Average Balance
|
Interest
|
Yield / Rate
|
Average Balance
|
Interest
|
Yield / Rate
|
|||||||||
Interest-earning assets:
|
|||||||||||||||
Interest and fees on loans
|
$ | 655,051 | 24,822 | 5.06% | 704,263 | 27,695 | 5.26% | ||||||||
Investments - taxable
|
196,007 | 2,430 | 1.66% | 160,137 | 3,362 | 2.81% | |||||||||
Investments - nontaxable*
|
102,572 | 3,770 | 4.91% | 136,525 | 4,487 | 4.39% | |||||||||
Other
|
20,067 | 34 | 0.23% | 12,204 | 19 | 0.20% | |||||||||
Total interest-earning assets
|
973,697 | 31,056 | 4.26% | 1,013,129 | 35,563 | 4.69% | |||||||||
Cash and due from banks
|
24,505 | 23,700 | |||||||||||||
Other assets
|
55,510 | 49,628 | |||||||||||||
Allowance for loan losses
|
(17,026 | ) | (15,655 | ) | |||||||||||
Total assets
|
$ | 1,036,686 | 1,070,802 | ||||||||||||
Interest-bearing liabilities:
|
|||||||||||||||
NOW, MMDA & savings deposits
|
$ | 349,378 | 913 | 0.35% | 341,277 | 1,836 | 0.72% | ||||||||
Time deposits
|
291,784 | 2,632 | 1.21% | 363,046 | 3,901 | 1.44% | |||||||||
FHLB / FRB borrowings
|
70,467 | 2,064 | 3.91% | 70,037 | 2,258 | 4.31% | |||||||||
Trust preferred securities
|
20,619 | 332 | 2.15% | 20,619 | 300 | 1.95% | |||||||||
Other
|
46,924 | 105 | 0.30% | 42,378 | 231 | 0.74% | |||||||||
Total interest-bearing liabilities
|
779,172 | 6,046 | 1.04% | 837,357 | 8,526 | 1.36% | |||||||||
Demand deposits
|
150,501 | 130,209 | |||||||||||||
Other liabilities
|
4,681 | 4,036 | |||||||||||||
Shareholders' equity
|
104,355 | 100,587 | |||||||||||||
Total liabilities and shareholder's equity
|
$ | 1,038,709 | 1,072,189 | ||||||||||||
Net interest spread
|
$ | 25,010 | 3.22% | 27,037 | 3.33% | ||||||||||
Net yield on interest-earning assets
|
3.43% | 3.57% | |||||||||||||
Taxable equivalent adjustment
|
|||||||||||||||
Investment securities
|
$ | 1,204 | 1,293 | ||||||||||||
Net interest income
|
$ | 23,806 | 25,744 | ||||||||||||
*Includes U.S. Government agency securities that are non-taxable for state income tax purposes of $4.0 million in 2012 and $47.6 million in 2011. An effective tax rate of 6.90% was used to calculate the tax equivalent yield on these securities.
|
Three months ended September 30, 2012
|
Nine months ended September 30, 2012
|
||||||||||||
compared to three months ended September 30, 2011
|
compared to nine months ended September 30, 2011
|
||||||||||||
(Dollars in thousands)
|
Changes in
average volume
|
Changes in
average rates
|
Total Increase (Decrease)
|
Changes in
average volume
|
Changes in
average rates
|
Total Increase (Decrease)
|
|||||||
Interest income:
|
|||||||||||||
Loans: Net of unearned income
|
$ | (614 | ) | (137 | ) | (751 | ) | (1,900 | ) | (973 | ) | (2,873 | ) |
Investments - taxable
|
(55 | ) | (708 | ) | (763 | ) | 599 | (1,531 | ) | (932 | ) | ||
Investments - nontaxable
|
(285 | ) | 154 | (131 | ) | (1,182 | ) | 465 | (717 | ) | |||
Other
|
10 | 1 | 11 | 12 | 3 | 15 | |||||||
Total interest income
|
(944 | ) | (690 | ) | (1,634 | ) | (2,471 | ) | (2,036 | ) | (4,507 | ) | |
Interest expense:
|
|||||||||||||
NOW, MMDA & savings deposits
|
1 | (244 | ) | (243 | ) | (915 | ) | (8 | ) | (923 | ) | ||
Time deposits
|
(243 | ) | (241 | ) | (484 | ) | (704 | ) | (565 | ) | (1,269 | ) | |
FHLB / FRB Borrowings
|
0 | (72 | ) | (72 | ) | 13 | (207 | ) | (194 | ) | |||
Trust Preferred Securities
|
- | 10 | 10 | - | 32 | 32 | |||||||
Other
|
1 | (43 | ) | (42 | ) | 17 | (143 | ) | (126 | ) | |||
Total interest expense
|
(241 | ) | (590 | ) | (831 | ) | (1,589 | ) | (891 | ) | (2,480 | ) | |
Net interest income
|
$ | (703 | ) | (100 | ) | (803 | ) | (882 | ) | (1,145 | ) | (2,027 | ) |
(Dollars in thousands)
|
|||||||
Number of Loans
|
Balance Outstanding
|
Non-accrual Balance
|
|||||
Land acquisition and development - commercial purposes
|
69 | $ | 17,706 | $ | 2,124 | ||
Land acquisition and development - residential purposes
|
318 | 53,472 | 8,742 | ||||
1 to 4 family residential construction
|
24 | 6,498 | - | ||||
Commercial construction
|
5 | 3,057 | - | ||||
Total construction and land development
|
416 | $ | 80,733 | $ | 10,866 |
·
|
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.
|
Percentage of Loans
|
||
By Risk Grade
|
||
Risk Grade
|
09/30/2012
|
12/31/2011
|
Risk Grade 1 (Excellent Quality)
|
2.94%
|
3.12%
|
Risk Grade 2 (High Quality)
|
16.69%
|
16.58%
|
Risk Grade 3 (Good Quality)
|
46.65%
|
49.30%
|
Risk Grade 4 (Management Attention)
|
21.75%
|
19.65%
|
Risk Grade 5 (Watch)
|
4.66%
|
4.76%
|
Risk Grade 6 (Substandard)
|
6.90%
|
6.21%
|
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%
|
(Dollars in thousands)
|
||||
September 30, 2012
|
December 31, 2011
|
|||
Contractual Cash Obligations
|
||||
Long-term borrowings
|
$ | 70,000 | 70,000 | |
Junior subordinated debentures
|
20,619 | 20,619 | ||
Operating lease obligations
|
4,287 | 4,326 | ||
Total
|
$ | 94,906 | 94,945 | |
Other Commitments
|
||||
Commitments to extend credit
|
$ | 134,557 | 131,565 | |
Standby letters of credit and financial guarantees written
|
3,429 | 3,288 | ||
Total
|
$ | 137,986 | 134,853 |
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
|
||||||||||
Total
|
||||||||||
Number of
|
||||||||||
Shares
|
Maximum
|
|||||||||
Purchased as
|
Number of
|
|||||||||
Part of
|
Shares that
|
|||||||||
Total
|
Publicly
|
May Yet Be
|
||||||||
Number of
|
Average
|
Announced
|
Purchased
|
|||||||
Shares
|
Price Paid
|
Plans or
|
Under the Plans
|
|||||||
Period
|
Purchased
|
per Share
|
Programs
|
or Programs
|
||||||
July 1 - 31, 2012
|
- | $ | - | - | - | |||||
August 1 - 31, 2012
|
357,234 | (1) | 1.19 | - | - | |||||
September 1 - 30, 2012
|
5,050 | (2) | 9.50 | - | - | |||||
Total
|
362,284 | $ | 1.31 | - |
(1) On August 8, 2012, the Company completed its repurchase of the Warrant to purchase 357,234 shares of the Company's common stock that was issued to UST on December 23, 2008, as part of the CPP under TARP. The Company repurchased the Warrant for a total price of $425,000.
|
(2) The Company purchased 5,050 shares on the open market in the three months ended September 30, 2012 for its deferred compensation plan. All purchases were funded by participant contributions to the plan.
|
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 the Registrant, 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 the Registrant, 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 the Registrant
|
|
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 the Registrant
|
|
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 the Registrant
|
|
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 the Registrant
|
|
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 the Registrant
|
|
and A. Joseph Lampron, Jr., 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, Jr. 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, Jr. 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
|
|
the Registrant, 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 the Registrant 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 the Registrant 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 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 (10)(p)
|
Underwriting Agreement with Merrill Lynch, Pierce, Fenner & Smith
|
|
Incorporated and Sandler O'Neill & Partners, L.P., as representatives of the
|
||
several underwriters listed on Schedule A thereto and the UST incorporated by
|
||
reference to Exhibit 1.1 to the Form 8-K filed with the Securities and Exchange
|
||
Commission on June 29, 2012
|
||
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
|
||
Exhibit (101)
|
The following materials from the Company's 10-Q Report for the quarterly
|
|
period ended September 30, 2012, formatted in XBRL: (i) the Condensed Consolidated
|
||
Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the
|
||
Condensed Consolidated Statements of Changes in Shareholders' Equity, (iv) the
|
||
Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the
|
||
Condensed Consolidated Financial Statements, tagged as blocks of text.*
|
||
*Furnished, not filed.
|
Peoples Bancorp of North Carolina, Inc.
|
||
November 9, 2012
|
/s/ Lance A. Sellers
|
|
Date
|
Lance A. Sellers
|
|
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
November 9, 2012
|
/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.
|
November 9, 2012
|
/s/ Lance A. Sellers
|
|
Date
|
Lance A. Sellers
|
|
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.
|
November 9, 2012
|
/s/ A. Joseph Lampron, Jr.
|
|
Date
|
A. Joseph Lampron, Jr.
|
|
Executive Vice President and Chief Financial Officer
|
||
(Principal Financial and Principal Accounting Officer)
|
November 9, 2012
|
/s/ Lance A. Sellers
|
|
Date
|
Lance A. Sellers
|
|
Chief Executive Officer
|
||
November 9, 2012
|
/s/ A. Joseph Lampron, Jr.
|
|
Date
|
A. Joseph Lampron, Jr.
|
|
Chief Financial Officer
|