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): October 21, 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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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 October 21, 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 October 21, 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: October 21, 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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October 21, 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 $1.9 million or $0.34 basic and diluted net earnings per share for the three months ended September 30, 2013, before adjustment for preferred stock dividends and accretion, as compared to $1.4 million or $0.25 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 $1.8 million or $0.31 basic and diluted net earnings per common share for the three months ended September 30, 2013, as compared to $1.3 million or $0.23 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 $2.8 million for the three months ended September 30, 2013 compared to $1.8 million for the same period one year ago.
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Core deposits were $678.0 million, or 84.9% of total deposits at September 30, 2013, compared to $624.5 million, or 81.3% of total deposits at September 30, 2012.
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CONSOLIDATED BALANCE SHEETS
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September 30, 2013, December 31, 2012 and September 30, 2012
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(Dollars in thousands)
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September 30, 2013
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December 31, 2012
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September 30, 2012
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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Cash and due from banks
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$ | 53,977 | $ | 32,617 | $ | 24,323 | |||
Interest bearing deposits
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26,973 | 16,226 | 31,581 | ||||||
Cash and cash equivalents
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80,950 | 48,843 | 55,904 | ||||||
Investment securities available for sale
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301,788 | 297,823 | 281,785 | ||||||
Other investments
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5,215 | 5,599 | 5,599 | ||||||
Total securities
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307,003 | 303,422 | 287,384 | ||||||
Mortgage loans held for sale
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2,201 | 6,922 | 5,984 | ||||||
Loans
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617,061 | 619,974 | 625,782 | ||||||
Less: Allowance for loan losses
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(13,854 | ) | (14,423 | ) | (16,551 | ) | |||
Net loans
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603,207 | 605,551 | 609,231 | ||||||
Premises and equipment, net
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16,543 | 15,874 | 16,091 | ||||||
Cash surrender value of life insurance
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13,597 | 13,273 | 13,142 | ||||||
Accrued interest receivable and other assets
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19,240 | 19,631 | 18,872 | ||||||
Total assets
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$ | 1,042,741 | $ | 1,013,516 | $ | 1,006,608 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Non-interest bearing demand
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$ | 188,860 | $ | 161,582 | $ | 152,281 | |||
NOW, MMDA & savings
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384,429 | 371,719 | 354,386 | ||||||
Time, $100,000 or more
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120,153 | 134,733 | 143,189 | ||||||
Other time
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104,849 | 113,491 | 118,614 | ||||||
Total deposits
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798,291 | 781,525 | 768,470 | ||||||
Securities sold under agreements to repurchase
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48,174 | 34,578 | 43,136 | ||||||
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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9,985 | 9,047 | 7,549 | ||||||
Total liabilities
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947,069 | 915,769 | 909,774 | ||||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; issued and outstanding
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12,524 shares at 9/30/13 and 12/31/12
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12,524 | 12,524 | 12,524 | ||||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,613,495 shares at 9/30/13 and 12/31/12
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48,133 | 48,133 | 48,004 | ||||||
Retained earnings
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35,810 | 31,478 | 30,815 | ||||||
Accumulated other comprehensive (loss) income
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(795 | ) | 5,612 | 5,491 | |||||
Total shareholders' equity
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95,672 | 97,747 | 96,834 | ||||||
Total liabilities and shareholders' equity
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$ | 1,042,741 | $ | 1,013,516 | $ | 1,006,608 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three and nine months ended September 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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Nine months ended
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September 30,
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September 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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$ | 7,592 | $ | 8,170 | $ | 22,671 | $ | 24,822 | ||||
Interest on due from banks
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22 | 15 | 62 | 34 | ||||||||
Interest on investment securities:
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U.S. Government sponsored enterprises
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307 | 519 | 970 | 2,327 | ||||||||
State and political subdivisions
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1,179 | 877 | 3,233 | 2,463 | ||||||||
Other
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88 | 74 | 264 | 206 | ||||||||
Total interest income
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9,188 | 9,655 | 27,200 | 29,852 | ||||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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160 | 274 | 578 | 913 | ||||||||
Time deposits
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396 | 737 | 1,285 | 2,632 | ||||||||
FHLB borrowings
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618 | 689 | 1,914 | 2,064 | ||||||||
Junior subordinated debentures
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100 | 110 | 299 | 332 | ||||||||
Other
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11 | 32 | 43 | 105 | ||||||||
Total interest expense
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1,285 | 1,842 | 4,119 | 6,046 | ||||||||
NET INTEREST INCOME
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7,903 | 7,813 | 23,081 | 23,806 | ||||||||
PROVISION FOR LOAN LOSSES
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337 | 761 | 2,164 | 4,413 | ||||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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7,566 | 7,052 | 20,917 | 19,393 | ||||||||
NON-INTEREST INCOME:
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Service charges
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1,189 | 1,222 | 3,333 | 3,601 | ||||||||
Other service charges and fees
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258 | 417 | 900 | 1,532 | ||||||||
Gain on sale of securities
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- | 12 | 614 | 1,203 | ||||||||
Mortgage banking income
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301 | 296 | 1,000 | 793 | ||||||||
Insurance and brokerage commissions
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161 | 150 | 478 | 404 | ||||||||
Miscellaneous
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1,202 | 789 | 3,522 | 2,325 | ||||||||
Total non-interest income
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3,111 | 2,886 | 9,847 | 9,858 | ||||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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4,183 | 4,187 | 12,614 | 11,960 | ||||||||
Occupancy
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1,357 | 1,291 | 3,988 | 3,891 | ||||||||
Other
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2,349 | 2,678 | 7,004 | 7,420 | ||||||||
Total non-interest expense
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7,889 | 8,156 | 23,606 | 23,271 | ||||||||
EARNINGS BEFORE INCOME TAXES
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2,788 | 1,782 | 7,158 | 5,980 | ||||||||
INCOME TAXES
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870 | 369 | 1,848 | 1,400 | ||||||||
NET EARNINGS
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1,918 | 1,413 | 5,310 | 4,580 | ||||||||
Dividends and accretion on preferred stock
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156 | 157 | 470 | 853 | ||||||||
NET EARNINGS AVAILABLE TO
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COMMON SHAREHOLDERS
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$ | 1,762 | $ | 1,256 | $ | 4,840 | $ | 3,727 | ||||
PER COMMON SHARE AMOUNTS
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Basic net earnings
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$ | 0.31 | $ | 0.23 | $ | 0.86 | $ | 0.67 | ||||
Diluted net earnings
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$ | 0.31 | $ | 0.23 | $ | 0.86 | $ | 0.67 | ||||
Cash dividends
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$ | 0.03 | $ | 0.02 | $ | 0.09 | $ | 0.11 | ||||
Book value
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$ | 14.81 | $ | 15.06 | $ | 14.81 | $ | 15.06 |
FINANCIAL HIGHLIGHTS
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For the three and nine months ended September 30, 2013 and 2012
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(Dollars in thousands)
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Three months ended
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Nine months ended
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September 30,
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September 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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$ | 296,936 | $ | 278,872 | $ | 291,524 | $ | 292,102 | ||||
Loans
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612,716 | 639,402 | 613,727 | 655,051 | ||||||||
Earning assets
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951,128 | 950,536 | 947,001 | 973,697 | ||||||||
Assets
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1,028,123 | 1,014,334 | 1,017,895 | 1,036,686 | ||||||||
Deposits
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791,991 | 772,483 | 783,403 | 791,663 | ||||||||
Shareholders' equity
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94,902 | 96,940 | 99,906 | 104,355 | ||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.54% | 3.45% | 3.48% | 3.43% | ||||||||
Return on average assets
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0.74% | 0.55% | 0.70% | 0.59% | ||||||||
Return on average shareholders' equity
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8.02% | 5.80% | 7.11% | 5.86% | ||||||||
Shareholders' equity to total assets (period end)
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9.18% | 9.62% | 9.18% | 9.62% | ||||||||
ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 14,029 | $ | 16,640 | $ | 14,423 | $ | 16,604 | ||||
Provision for loan losses
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337 | 761 | 2,164 | 4,413 | ||||||||
Charge-offs
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(970 | ) | (1,266 | ) | (3,483 | ) | (5,642 | ) | ||||
Recoveries
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458 | 416 | 750 | 1,176 | ||||||||
Balance, end of period
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$ | 13,854 | $ | 16,551 | $ | 13,854 | $ | 16,551 | ||||
ASSET QUALITY:
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Non-accrual loans
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$ | 14,144 | $ | 18,839 | ||||||||
90 days past due and still accruing
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2,173 | 2,398 | ||||||||||
Other real estate owned
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2,751 | 6,595 | ||||||||||
Repossessed assets
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- | 5 | ||||||||||
Total non-performing assets
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$ | 19,068 | $ | 27,837 | ||||||||
Non-performing assets to total assets
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1.83% | 2.77% | ||||||||||
Allowance for loan losses to non-performing assets
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72.65% | 59.46% | ||||||||||
Allowance for loan losses to total loans
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2.25% | 2.64% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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09/30/2013
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09/30/2012
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Risk Grade 1 (excellent quality)
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2.73%
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2.94%
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Risk Grade 2 (high quality)
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18.54%
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16.69%
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Risk Grade 3 (good quality)
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49.89%
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46.65%
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Risk Grade 4 (management attention)
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18.17%
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21.75%
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Risk Grade 5 (watch)
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5.22%
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4.66%
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Risk Grade 6 (substandard)
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5.16%
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6.90%
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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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0.00%
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0.00%
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At September 30, 2013, including non-accrual loans, there were seven relationships exceeding $1.0 million in the Watch risk grade (which totaled $12.6 million) and four relationships exceeding $1.0 million in the Substandard risk grade (which totaled $10.3 million). There was one relationship with loans in both the Watch and Substandard risk grades, which totaled $1.2 million for loans in both risk grades combined.
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(END)
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