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 21, 2014
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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 21, 2014
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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 21, 2014
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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, 2014
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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 21, 2014
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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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PEOPLES BANCORP ANNOUNCES FIRST QUARTER EARNINGS RESULTS
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Net earnings were $2.6 million or $0.45 basic and diluted net earnings per share for the three months ended June 30, 2014, as compared to $1.6 million or $0.29 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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Net earnings available to common shareholders were $2.6 million or $0.45 basic and diluted net earnings per common share for the three months ended June 30, 2014, as compared to $1.5 million or $0.26 basic and diluted net earnings per common share, for the same period one year ago.
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Earnings before securities gains and income taxes were $3.5 million for the three months ended June 30, 2014, compared to $1.7 million for the same period one year ago.
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Total loans increased $15.3 million during the three months ended June 30, 2014, as compared to a $1.9 million decrease during the same period one year ago.
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Net earnings were $5.1 million or $0.91 basic and diluted net earnings per share for the six months ended June 30, 2014, as compared to $3.4 million or $0.60 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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Net earnings available to common shareholders were $5.1 million or $0.91 basic and diluted net earnings per common share for the six months ended June 30, 2014, as compared to $3.1 million or $0.55 basic and diluted net earnings per common share, for the same period one year ago.
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Earnings before securities gains and income taxes were $6.9 million for the six months ended June 30, 2014, compared to $3.8 million for the same period one year ago.
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Non-performing assets declined to $14.8 million or 1.4% of total assets at June 30, 2014, compared to $23.4 million or 2.3% of total assets at June 30, 2013.
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Total loans increased $25.3 million to $633.3 million at June 30, 2014, compared to $608.1 million at June 30, 2013.
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Core deposits were $699.1 million, or 86.2% of total deposits at June 30, 2014, compared to $665.4 million, or 84.4% of total deposits at June 30, 2013.
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CONSOLIDATED BALANCE SHEETS
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June 30, 2014, December 31, 2013 and June 30, 2013
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(Dollars in thousands)
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June 30, 2014
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December 31, 2013
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June 30, 2013
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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Cash and due from banks
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$ | 54,522 | $ | 49,902 | $ | 28,082 | |||
Interest-bearing deposits
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20,546 | 26,871 | 52,634 | ||||||
Cash and cash equivalents
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75,068 | 76,773 | 80,716 | ||||||
Investment securities available for sale
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297,165 | 297,890 | 293,151 | ||||||
Other investments
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4,706 | 4,990 | 5,215 | ||||||
Total securities
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301,871 | 302,880 | 298,366 | ||||||
Mortgage loans held for sale
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2,048 | 497 | 6,002 | ||||||
Loans
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633,336 | 620,960 | 608,072 | ||||||
Less: Allowance for loan losses
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(12,675 | ) | (13,501 | ) | (14,029 | ) | |||
Net loans
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620,661 | 607,459 | 594,043 | ||||||
Premises and equipment, net
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16,762 | 16,358 | 16,635 | ||||||
Cash surrender value of life insurance
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13,914 | 13,706 | 13,487 | ||||||
Accrued interest receivable and other assets
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17,528 | 17,011 | 18,791 | ||||||
Total assets
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$ | 1,047,852 | $ | 1,034,684 | $ | 1,028,040 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Noninterest-bearing demand
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$ | 206,655 | $ | 195,265 | $ | 172,055 | |||
NOW, MMDA & savings
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397,305 | 386,893 | 385,014 | ||||||
Time, $100,000 or more
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112,201 | 115,268 | 123,612 | ||||||
Other time
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95,318 | 101,935 | 107,752 | ||||||
Total deposits
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811,479 | 799,361 | 788,433 | ||||||
Securities sold under agreements to repurchase
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46,764 | 45,396 | 45,971 | ||||||
FHLB borrowings
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65,000 | 65,000 | 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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10,943 | 20,589 | 7,665 | ||||||
Total liabilities
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954,805 | 950,965 | 932,688 | ||||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; issued and outstanding
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12,524 shares at 6/30/13
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- | - | 12,524 | ||||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,617,125 shares at 6/30/14 and
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5,613,495 shares at 12/31/13
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48,170 | 48,133 | 48,133 | ||||||
Retained earnings
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41,433 | 36,758 | 34,218 | ||||||
Accumulated other comprehensive income (loss)
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3,444 | (1,172 | ) | 477 | |||||
Total shareholders' equity
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93,047 | 83,719 | 95,352 | ||||||
Total liabilities and shareholders' equity
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$ | 1,047,852 | $ | 1,034,684 | $ | 1,028,040 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three and six months ended June 30, 2014 and 2013
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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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2014
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2013
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2014
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2013
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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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$ | 7,491 | $ | 7,439 | $ | 14,893 | $ | 15,079 | |||
Interest on due from banks
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12 | 28 | 24 | 40 | |||||||
Interest on investment securities:
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U.S. Government sponsored enterprises
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804 | 286 | 1,651 | 664 | |||||||
State and political subdivisions
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1,169 | 1,069 | 2,346 | 2,053 | |||||||
Other
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100 | 87 | 207 | 176 | |||||||
Total interest income
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9,576 | 8,909 | 19,121 | 18,012 | |||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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125 | 200 | 251 | 418 | |||||||
Time deposits
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303 | 422 | 637 | 889 | |||||||
FHLB borrowings
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549 | 635 | 1,094 | 1,296 | |||||||
Junior subordinated debentures
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97 | 100 | 193 | 199 | |||||||
Other
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11 | 15 | 21 | 32 | |||||||
Total interest expense
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1,085 | 1,372 | 2,196 | 2,834 | |||||||
NET INTEREST INCOME
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8,491 | 7,537 | 16,925 | 15,178 | |||||||
PROVISION FOR LOAN LOSSES
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67 | 773 | (282 | ) | 1,827 | ||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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8,424 | 6,764 | 17,207 | 13,351 | |||||||
NON-INTEREST INCOME:
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Service charges
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1,223 | 1,104 | 2,352 | 2,143 | |||||||
Other service charges and fees
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260 | 268 | 679 | 642 | |||||||
Gain on sale of securities
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- | 352 | 26 | 614 | |||||||
Mortgage banking income
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188 | 315 | 292 | 699 | |||||||
Insurance and brokerage commissions
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162 | 178 | 361 | 317 | |||||||
Miscellaneous
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1,277 | 1,092 | 2,242 | 2,321 | |||||||
Total non-interest income
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3,110 | 3,309 | 5,952 | 6,736 | |||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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4,207 | 4,240 | 8,483 | 8,430 | |||||||
Occupancy
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1,466 | 1,320 | 2,988 | 2,632 | |||||||
Other
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2,394 | 2,419 | 4,720 | 4,655 | |||||||
Total non-interest expense
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8,067 | 7,979 | 16,191 | 15,717 | |||||||
EARNINGS BEFORE INCOME TAXES
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3,467 | 2,094 | 6,968 | 4,370 | |||||||
INCOME TAXES
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916 | 461 | 1,838 | 979 | |||||||
NET EARNINGS
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2,551 | 1,633 | 5,130 | 3,391 | |||||||
Dividends and accretion on preferred stock
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- | 156 | - | 313 | |||||||
NET EARNINGS AVAILABLE TO
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COMMON SHAREHOLDERS
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$ | 2,551 | $ | 1,477 | $ | 5,130 | $ | 3,078 | |||
PER COMMON SHARE AMOUNTS
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Basic net earnings
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$ | 0.45 | $ | 0.26 | $ | 0.91 | $ | 0.55 | |||
Diluted net earnings
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$ | 0.45 | $ | 0.26 | $ | 0.91 | $ | 0.55 | |||
Cash dividends
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$ | 0.04 | $ | 0.03 | $ | 0.08 | $ | 0.06 | |||
Book value
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$ | 16.56 | $ | 14.76 | $ | 16.56 | $ | 14.76 |
FINANCIAL HIGHLIGHTS
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For the three and six months ended June 30, 2014 and 2013
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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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2014
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2013
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2014
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2013
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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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$ | 295,185 | $ | 290,995 | $ | 297,090 | $ | 288,773 | |||||
Loans
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619,675 | 607,481 | 618,574 | 614,241 | |||||||||
Earning assets
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938,245 | 952,898 | 940,472 | 944,903 | |||||||||
Assets
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1,024,988 | 1,021,044 | 1,022,147 | 1,012,697 | |||||||||
Deposits
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797,820 | 784,372 | 798,058 | 779,038 | |||||||||
Shareholders' equity
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92,388 | 100,054 | 91,331 | 100,532 | |||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.88% | 3.40% | 3.88% | 3.46% | |||||||||
Return on average assets
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1.00% | 0.64% | 1.01% | 0.68% | |||||||||
Return on average shareholders' equity
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11.08% | 6.55% | 11.33% | 6.80% | |||||||||
Shareholders' equity to total assets (period end)
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8.88% | 9.28% | 8.88% | 9.28% | |||||||||
ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 12,978 | $ | 14,412 | $ | 13,501 | $ | 14,423 | |||||
Provision for loan losses
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67 | 773 | (282 | ) | 1,827 | ||||||||
Charge-offs
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(597 | ) | (1,334 | ) | (1,172 | ) | (2,513 | ) | |||||
Recoveries
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227 | 178 | 628 | 292 | |||||||||
Balance, end of period
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$ | 12,675 | $ | 14,029 | $ | 12,675 | $ | 14,029 | |||||
ASSET QUALITY:
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Non-accrual loans
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$ | 10,921 | $ | 16,107 | |||||||||
90 days past due and still accruing
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392 | 2,861 | |||||||||||
Other real estate owned
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3,532 | 4,401 | |||||||||||
Total non-performing assets
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$ | 14,845 | $ | 23,369 | |||||||||
Non-performing assets to total assets
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1.42% | 2.27% | |||||||||||
Allowance for loan losses to non-performing assets
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85.38% | 60.03% | |||||||||||
Allowance for loan losses to total loans
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2.00% | 2.31% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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6/30/2014
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6/30/2013
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Risk Grade 1 (excellent quality)
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2.17%
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2.77%
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Risk Grade 2 (high quality)
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20.56%
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17.03%
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Risk Grade 3 (good quality)
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50.74%
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49.95%
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Risk Grade 4 (management attention)
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16.75%
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18.86%
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Risk Grade 5 (watch)
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4.84%
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4.87%
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Risk Grade 6 (substandard)
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4.62%
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6.17%
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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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0.01%
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0.02%
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At June 30, 2014, including non-accrual loans, there were six relationships exceeding $1.0 million in the Watch risk grade (which totaled $12.4 million) and four relationships exceeding $1.0 million in the Substandard risk grade (which totaled $9.8 million).
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(END)
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