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 20, 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 October 20, 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 October 20, 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: October 20, 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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October 20, 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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·
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Net earnings were $2.4 million or $0.43 basic and diluted net earnings per share for the three months ended September 30, 2014, as compared to $1.9 million or $0.34 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 $2.4 million or $0.43 basic and diluted net earnings per common share for the three months ended September 30, 2014, as compared to $1.8 million or $0.31 basic and diluted net earnings per common share, for the same period one year ago.
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Total loans increased $17.2 million during the three months ended September 30, 2014, as compared to a $9.0 million increase during the same period one year ago.
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Net earnings were $7.6 million or $1.35 basic net earnings per share and $1.34 diluted net earnings per share for the nine months ended September 30, 2014, as compared to $5.3 million or $0.95 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 $7.6 million or $1.35 basic net earnings per common share and $1.34 diluted net earnings per common share for the nine months ended September 30, 2014, as compared to $4.8 million or $0.86 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 $9.6 million for the nine months ended September 30, 2014, compared to $6.5 million for the same period one year ago.
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Non-performing assets declined to $12.6 million or 1.2% of total assets at September 30, 2014, compared to $19.1 million or 1.8% of total assets at September 30, 2013.
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Total loans increased $33.5 million to $650.6 million at September 30, 2014, compared to $617.1 million at September 30, 2013.
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Core deposits were $707.2 million, or 86.6% of total deposits at September 30, 2014, compared to $678.0 million, or 84.9% of total deposits at September 30, 2013.
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CONSOLIDATED BALANCE SHEETS
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September 30, 2014, December 31, 2013 and September 30, 2013
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(Dollars in thousands)
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September 30, 2014
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December 31, 2013
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September 30, 2013
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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Cash and due from banks
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$ | 34,887 | $ | 49,902 | $ | 53,977 | |||
Interest-bearing deposits
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50,636 | 26,871 | 26,973 | ||||||
Cash and cash equivalents
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85,523 | 76,773 | 80,950 | ||||||
Investment securities available for sale
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279,787 | 297,890 | 301,788 | ||||||
Other investments
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4,706 | 4,990 | 5,215 | ||||||
Total securities
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284,493 | 302,880 | 307,003 | ||||||
Mortgage loans held for sale
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887 | 497 | 2,201 | ||||||
Loans
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650,550 | 620,960 | 617,061 | ||||||
Less: Allowance for loan losses
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(12,343 | ) | (13,501 | ) | (13,854 | ) | |||
Net loans
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638,207 | 607,459 | 603,207 | ||||||
Premises and equipment, net
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17,482 | 16,358 | 16,543 | ||||||
Cash surrender value of life insurance
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14,020 | 13,706 | 13,597 | ||||||
Accrued interest receivable and other assets
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13,323 | 17,011 | 19,240 | ||||||
Total assets
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$ | 1,053,935 | $ | 1,034,684 | $ | 1,042,741 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Noninterest-bearing demand
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$ | 211,832 | $ | 195,265 | $ | 188,860 | |||
NOW, MMDA & savings
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403,240 | 386,893 | 384,429 | ||||||
Time, $100,000 or more
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109,489 | 115,268 | 120,153 | ||||||
Other time
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92,234 | 101,935 | 104,849 | ||||||
Total deposits
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816,795 | 799,361 | 798,291 | ||||||
Securities sold under agreements to repurchase
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47,020 | 45,396 | 48,174 | ||||||
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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8,294 | 20,589 | 9,985 | ||||||
Total liabilities
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957,728 | 950,965 | 947,069 | ||||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; issued and outstanding
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12,524 shares at 9/30/13
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- | - | 12,524 | ||||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,617,125 shares at 9/30/14 and
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5,613,495 shares at 12/31/13
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48,170 | 48,133 | 48,133 | ||||||
Retained earnings
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43,648 | 36,758 | 35,810 | ||||||
Accumulated other comprehensive income (loss)
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4,389 | (1,172 | ) | (795 | ) | ||||
Total shareholders' equity
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96,207 | 83,719 | 95,672 | ||||||
Total liabilities and shareholders' equity
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$ | 1,053,935 | $ | 1,034,684 | $ | 1,042,741 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three and nine months ended September 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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Nine months ended
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September 30,
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September 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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$ | 7,664 | $ | 7,592 | $ | 22,556 | $ | 22,671 | ||||
Interest on due from banks
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18 | 22 | 42 | 62 | ||||||||
Interest on investment securities:
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U.S. Government sponsored enterprises
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646 | 307 | 2,298 | 970 | ||||||||
State and political subdivisions
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1,168 | 1,179 | 3,514 | 3,233 | ||||||||
Other
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87 | 88 | 294 | 264 | ||||||||
Total interest income
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9,583 | 9,188 | 28,704 | 27,200 | ||||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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124 | 160 | 375 | 578 | ||||||||
Time deposits
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287 | 396 | 924 | 1,285 | ||||||||
FHLB borrowings
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556 | 618 | 1,650 | 1,914 | ||||||||
Junior subordinated debentures
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98 | 100 | 291 | 299 | ||||||||
Other
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11 | 11 | 33 | 43 | ||||||||
Total interest expense
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1,076 | 1,285 | 3,273 | 4,119 | ||||||||
NET INTEREST INCOME
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8,507 | 7,903 | 25,431 | 23,081 | ||||||||
PROVISION FOR LOAN LOSSES
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256 | 337 | (27 | ) | 2,164 | |||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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8,251 | 7,566 | 25,458 | 20,917 | ||||||||
NON-INTEREST INCOME:
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Service charges
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1,303 | 1,189 | 3,655 | 3,333 | ||||||||
Other service charges and fees
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213 | 258 | 892 | 900 | ||||||||
Gain on sale of securities
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240 | - | 266 | 614 | ||||||||
Mortgage banking income
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256 | 301 | 548 | 1,000 | ||||||||
Insurance and brokerage commissions
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161 | 161 | 521 | 478 | ||||||||
Miscellaneous
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1,034 | 1,202 | 3,276 | 3,522 | ||||||||
Total non-interest income
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3,207 | 3,111 | 9,158 | 9,847 | ||||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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4,301 | 4,183 | 12,784 | 12,614 | ||||||||
Occupancy
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1,489 | 1,357 | 4,476 | 3,988 | ||||||||
Other
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2,751 | 2,349 | 7,471 | 7,004 | ||||||||
Total non-interest expense
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8,541 | 7,889 | 24,731 | 23,606 | ||||||||
EARNINGS BEFORE INCOME TAXES
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2,917 | 2,788 | 9,885 | 7,158 | ||||||||
INCOME TAXES
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475 | 870 | 2,313 | 1,848 | ||||||||
NET EARNINGS
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2,442 | 1,918 | 7,572 | 5,310 | ||||||||
Dividends and accretion on preferred stock
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- | 156 | - | 470 | ||||||||
NET EARNINGS AVAILABLE TO
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COMMON SHAREHOLDERS
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$ | 2,442 | $ | 1,762 | $ | 7,572 | $ | 4,840 | ||||
PER COMMON SHARE AMOUNTS
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Basic net earnings
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$ | 0.43 | $ | 0.31 | $ | 1.35 | $ | 0.86 | ||||
Diluted net earnings
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$ | 0.43 | $ | 0.31 | $ | 1.34 | $ | 0.86 | ||||
Cash dividends
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$ | 0.04 | $ | 0.03 | $ | 0.12 | $ | 0.09 | ||||
Book value
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$ | 17.13 | $ | 14.81 | $ | 17.13 | $ | 14.81 |
FINANCIAL HIGHLIGHTS
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For the three and nine months ended September 30, 2014 and 2013
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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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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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$ | 283,358 | $ | 296,936 | $ | 292,463 | $ | 291,524 | ||||
Loans
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638,192 | 612,716 | 625,185 | 613,727 | ||||||||
Earning assets
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954,899 | 951,128 | 945,334 | 947,001 | ||||||||
Assets
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1,046,679 | 1,028,123 | 1,030,414 | 1,017,895 | ||||||||
Deposits
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812,438 | 791,991 | 802,904 | 783,403 | ||||||||
Shareholders' equity
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96,020 | 94,902 | 94,530 | 99,906 | ||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.78% | 3.54% | 3.85% | 3.48% | ||||||||
Return on average assets
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0.93% | 0.74% | 0.98% | 0.70% | ||||||||
Return on average shareholders' equity
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10.09% | 8.02% | 10.71% | 7.11% | ||||||||
Shareholders' equity to total assets (period end)
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9.13% | 9.18% | 9.13% | 9.18% | ||||||||
ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 12,675 | $ | 14,029 | $ | 13,501 | $ | 14,423 | ||||
Provision for loan losses
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256 | 337 | (27 | ) | 2,164 | |||||||
Charge-offs
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(749 | ) | (970 | ) | (1,920 | ) | (3,483 | ) | ||||
Recoveries
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161 | 458 | 789 | 750 | ||||||||
Balance, end of period
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$ | 12,343 | $ | 13,854 | $ | 12,343 | $ | 13,854 | ||||
ASSET QUALITY:
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Non-accrual loans
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$ | 10,634 | $ | 14,144 | ||||||||
90 days past due and still accruing
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120 | 2,173 | ||||||||||
Other real estate owned
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1,840 | 2,751 | ||||||||||
Total non-performing assets
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$ | 12,594 | $ | 19,068 | ||||||||
Non-performing assets to total assets
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1.19% | 1.83% | ||||||||||
Allowance for loan losses to non-performing assets
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98.01% | 72.65% | ||||||||||
Allowance for loan losses to total loans
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1.90% | 2.25% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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9/30/2014
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9/30/2013
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Risk Grade 1 (excellent quality)
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2.15%
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2.73%
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Risk Grade 2 (high quality)
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21.49%
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18.54%
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Risk Grade 3 (good quality)
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51.65%
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49.89%
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Risk Grade 4 (management attention)
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15.40%
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18.17%
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Risk Grade 5 (watch)
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4.57%
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5.22%
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Risk Grade 6 (substandard)
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4.43%
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5.16%
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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, 2014, including non-accrual loans, there were five relationships exceeding $1.0 million in the Watch risk grade (which totaled $11.5 million) and four relationships exceeding $1.0 million in the Substandard risk grade (which totaled $8.8 million).
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(END)
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