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 22, 2013
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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 22, 2013
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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 22, 2013
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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 22, 2013
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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 22, 2013
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Contact:
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Lance A. Sellers
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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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·
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Net earnings were $1.6 million or $0.29 basic and diluted net earnings per share for the three months ended June 30, 2013, before adjustment for preferred stock dividends and accretion, as compared to $1.5 million or $0.27 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 $1.5 million or $0.26 basic and diluted net earnings per common share for the three months ended June 30, 2013, as compared to $1.2 million or $0.21 basic and diluted net earnings per common share, for the same period one year ago.
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·
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Earnings before securities gains and income taxes were $1.7 million for the three months ended June 30, 2013 compared to $1.3 million for the same period one year ago.
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·
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Core deposits were $665.4 million, or 84.4% of total deposits at June 30, 2013, compared to $622.6 million, or 79.8% of total deposits at June 30, 2012.
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CONSOLIDATED BALANCE SHEETS
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June 30, 2013, December 31, 2012 and June 30, 2012
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(Dollars in thousands)
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June 30, 2013
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December 31, 2012
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June 30, 2012
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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Cash and due from banks
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$ | 28,082 | $ | 32,617 | $ | 25,350 | |||
Interest bearing deposits
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52,634 | 16,226 | 44,127 | ||||||
Cash and cash equivalents
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80,716 | 48,843 | 69,477 | ||||||
Investment securities available for sale
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293,151 | 297,823 | 280,735 | ||||||
Other investments
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5,215 | 5,599 | 5,734 | ||||||
Total securities
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298,366 | 303,422 | 286,469 | ||||||
Mortgage loans held for sale
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6,002 | 6,922 | 3,753 | ||||||
Loans
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608,072 | 619,974 | 642,815 | ||||||
Less: Allowance for loan losses
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(14,029 | ) | (14,423 | ) | (16,640 | ) | |||
Net loans
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594,043 | 605,551 | 626,175 | ||||||
Premises and equipment, net
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16,635 | 15,874 | 16,342 | ||||||
Cash surrender value of life insurance
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13,487 | 13,273 | 13,040 | ||||||
Accrued interest receivable and other assets
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18,791 | 19,631 | 19,833 | ||||||
Total assets
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$ | 1,028,040 | $ | 1,013,516 | $ | 1,035,089 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Non-interest bearing demand
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$ | 172,055 | $ | 161,582 | $ | 147,825 | |||
NOW, MMDA & savings
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385,014 | 371,719 | 353,076 | ||||||
Time, $100,000 or more
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123,612 | 134,733 | 156,974 | ||||||
Other time
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107,752 | 113,491 | 122,671 | ||||||
Total deposits
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788,433 | 781,525 | 780,546 | ||||||
Securities sold under agreements to repurchase
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45,971 | 34,578 | 50,510 | ||||||
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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7,665 | 9,047 | 18,574 | ||||||
Total liabilities
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932,688 | 915,769 | 940,249 | ||||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; issued and outstanding
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12,524 shares at 6/30/13 and 12/31/12
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12,524 | 12,524 | 12,298 | ||||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,613,495 shares at 6/30/13 and 12/31/12
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48,133 | 48,133 | 48,298 | ||||||
Retained earnings
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34,218 | 31,478 | 29,617 | ||||||
Accumulated other comprehensive income
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477 | 5,612 | 4,627 | ||||||
Total shareholders' equity
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95,352 | 97,747 | 94,840 | ||||||
Total liabilities and shareholders' equity
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$ | 1,028,040 | $ | 1,013,516 | $ | 1,035,089 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three and six months ended June 30, 2013 and 2012
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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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2013
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2012
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2013
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2012
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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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$ | 7,439 | $ | 8,211 | $ | 15,079 | $ | 16,633 | |||
Interest on due from banks
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28 | 16 | 40 | 19 | |||||||
Interest on investment securities:
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U.S. Government sponsored enterprises
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286 | 737 | 664 | 1,807 | |||||||
State and political subdivisions
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1,069 | 787 | 2,053 | 1,587 | |||||||
Other
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87 | 84 | 176 | 151 | |||||||
Total interest income
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8,909 | 9,835 | 18,012 | 20,197 | |||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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200 | 295 | 418 | 639 | |||||||
Time deposits
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422 | 864 | 889 | 1,896 | |||||||
FHLB borrowings
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635 | 684 | 1,296 | 1,374 | |||||||
Junior subordinated debentures
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100 | 110 | 199 | 222 | |||||||
Other
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15 | 34 | 32 | 73 | |||||||
Total interest expense
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1,372 | 1,987 | 2,834 | 4,204 | |||||||
NET INTEREST INCOME
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7,537 | 7,848 | 15,178 | 15,993 | |||||||
PROVISION FOR LOAN LOSSES
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773 | 1,603 | 1,827 | 3,652 | |||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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6,764 | 6,245 | 13,351 | 12,341 | |||||||
NON-INTEREST INCOME:
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Service charges
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1,104 | 1,192 | 2,143 | 2,379 | |||||||
Other service charges and fees
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268 | 258 | 642 | 599 | |||||||
Gain on sale of securities
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352 | 664 | 614 | 1,191 | |||||||
Mortgage banking income
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315 | 271 | 699 | 497 | |||||||
Insurance and brokerage commissions
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178 | 119 | 317 | 254 | |||||||
Miscellaneous
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1,092 | 1,089 | 2,321 | 2,052 | |||||||
Total non-interest income
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3,309 | 3,593 | 6,736 | 6,972 | |||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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4,240 | 3,931 | 8,430 | 7,772 | |||||||
Occupancy
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1,320 | 1,300 | 2,632 | 2,600 | |||||||
Other
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2,419 | 2,612 | 4,655 | 4,742 | |||||||
Total non-interest expense
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7,979 | 7,843 | 15,717 | 15,114 | |||||||
EARNINGS BEFORE INCOME TAXES
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2,094 | 1,995 | 4,370 | 4,199 | |||||||
INCOME TAXES
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461 | 486 | 979 | 1,031 | |||||||
NET EARNINGS
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1,633 | 1,509 | 3,391 | 3,168 | |||||||
Dividends and accretion on preferred stock
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156 | 348 | 313 | 697 | |||||||
NET EARNINGS AVAILABLE TO
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COMMON SHAREHOLDERS
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$ | 1,477 | $ | 1,161 | $ | 3,078 | $ | 2,471 | |||
PER COMMON SHARE AMOUNTS
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Basic net earnings
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$ | 0.26 | $ | 0.21 | $ | 0.55 | $ | 0.45 | |||
Diluted net earnings
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$ | 0.26 | $ | 0.21 | $ | 0.55 | $ | 0.45 | |||
Cash dividends
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$ | 0.03 | $ | 0.02 | $ | 0.03 | $ | 0.09 | |||
Book value
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$ | 14.76 | $ | 14.89 | $ | 14.76 | $ | 14.89 |
FINANCIAL HIGHLIGHTS
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For the three and six months ended June 30, 2013 and 2012
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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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2013
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2012
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2013
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2012
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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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$ | 290,995 | $ | 284,129 | $ | 288,773 | $ | 298,790 | ||||
Loans
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607,481 | 654,343 | 614,241 | 662,962 | ||||||||
Earning assets
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952,898 | 972,963 | 944,903 | 985,405 | ||||||||
Assets
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1,021,044 | 1,036,560 | 1,012,697 | 1,047,985 | ||||||||
Deposits
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784,372 | 788,459 | 779,038 | 801,359 | ||||||||
Shareholders' equity
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100,054 | 106,671 | 100,532 | 106,691 | ||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.40% | 3.40% | 3.46% | 3.42% | ||||||||
Return on average assets
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0.64% | 0.59% | 0.68% | 0.61% | ||||||||
Return on average shareholders' equity
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6.55% | 5.69% | 6.80% | 5.97% | ||||||||
Shareholders' equity to total assets (period end)
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9.28% | 9.16% | 9.28% | 9.16% | ||||||||
ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 14,412 | $ | 16,612 | $ | 14,423 | $ | 16,604 | ||||
Provision for loan losses
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773 | 1,603 | 1,827 | 3,652 | ||||||||
Charge-offs
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(1,334 | ) | (1,780 | ) | (2,513 | ) | (4,376 | ) | ||||
Recoveries
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178 | 205 | 292 | 760 | ||||||||
Balance, end of period
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$ | 14,029 | $ | 16,640 | $ | 14,029 | $ | 16,640 | ||||
ASSET QUALITY:
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Non-accrual loans
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$ | 16,107 | $ | 21,074 | ||||||||
90 days past due and still accruing
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2,861 | 1,797 | ||||||||||
Other real estate owned
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4,401 | 6,505 | ||||||||||
Repossessed assets
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- | 11 | ||||||||||
Total non-performing assets
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$ | 23,369 | $ | 29,387 | ||||||||
Non-performing assets to total assets
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2.27% | 2.84% | ||||||||||
Allowance for loan losses to non-performing assets
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60.03% | 56.62% | ||||||||||
Allowance for loan losses to total loans
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2.31% | 2.59% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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06/30/2013
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06/30/2012
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Risk Grade 1 (excellent quality)
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2.77%
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3.00%
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Risk Grade 2 (high quality)
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17.03%
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16.57%
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Risk Grade 3 (good quality)
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49.95%
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48.12%
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Risk Grade 4 (management attention)
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18.86%
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20.75%
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Risk Grade 5 (watch)
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4.87%
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4.29%
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Risk Grade 6 (substandard)
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6.17%
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6.91%
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Risk Grade 7 (doubtful)
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0.00%
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0.00%
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Risk Grade 8 (loss)
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0.02%
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0.00%
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At June 30, 2013, including non-accrual loans, there were eight relationships exceeding $1.0 million in the Watch risk grade (which totaled $15.1 million) and four relationships exceeding $1.0 million in the Substandard risk grade (which totaled $10.7 million). There were two relationships with loans in the Watch risk grade and the Substandard risk grade exceeding $1.0 million total (which totaled $2.6 million).
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(END)
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