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): January 26, 2015
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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 January 26, 2015
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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 January 26, 2015
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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: January 26, 2015
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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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January 26, 2015
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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 $1.8 million or $0.32 basic and diluted net earnings per share for the three months ended December 31, 2014, 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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Net earnings available to common shareholders were $1.8 million or $0.32 basic and diluted net earnings per common share for the three months ended December 31, 2014, 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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Core earnings*, as calculated in the Core Earnings Analysis table below, were $2.7 million for the three months ended December 31, 2014, compared to $2.0 million for the three months ended December 31, 2013.
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Average outstanding principal balance of loans increased $31.5 million to $648.4 million for the three months ended December 31, 2014 compared to $616.9 million for the three months ended December 31, 2013.
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Net earnings were $9.4 million or $1.67 basic net earnings per share and $1.66 diluted net earnings per share for the year ended December 31, 2014, as compared to $6.7 million or $1.19 basic and diluted net earnings per share, before adjustment for preferred stock dividends and accretion, for the year ended December 31, 2013.
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Net earnings available to common shareholders were $9.4 million or $1.67 basic net earnings per common share and $1.66 diluted net earnings per common share for the year ended December 31, 2014, as compared to $6.0 million or $1.08 basic net earnings per common share and $1.07 diluted net earnings per common share, for the year ended December 31, 2013.
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Core earnings*, as calculated in the Core Earnings Analysis table below, were $10.2 million for the year ended December 31, 2014, compared to $7.2 million for the year ended December 31, 2013.
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Non-performing assets declined to $12.7 million or 1.2% of total assets at December 31, 2014, compared to $16.4 million or 1.6% of total assets at December 31, 2013.
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Total loans increased $30.9 million to $651.9 million at December 31, 2014, compared to $621.0 million at December 31, 2013.
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Core deposits were $708.1 million, or 86.9% of total deposits at December 31, 2014, compared to $683.9 million, or 85.6% of total deposits at December 31, 2013.
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CONSOLIDATED BALANCE SHEETS
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December 31, 2014 and December 31, 2013
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(Dollars in thousands)
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December 31, 2014
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December 31, 2013
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(Unaudited)
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(Audited)
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ASSETS:
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Cash and due from banks
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$ | 51,213 | $ | 49,902 | ||
Interest-bearing deposits
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17,885 | 26,871 | ||||
Cash and cash equivalents
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69,098 | 76,773 | ||||
Investment securities available for sale
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281,099 | 297,890 | ||||
Other investments
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4,031 | 4,990 | ||||
Total securities
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285,130 | 302,880 | ||||
Mortgage loans held for sale
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1,375 | 497 | ||||
Loans
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651,891 | 620,960 | ||||
Less: Allowance for loan losses
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(11,082 | ) | (13,501 | ) | ||
Net loans
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640,809 | 607,459 | ||||
Premises and equipment, net
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17,000 | 16,358 | ||||
Cash surrender value of life insurance
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14,125 | 13,706 | ||||
Accrued interest receivable and other assets
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12,957 | 17,011 | ||||
Total assets
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$ | 1,040,494 | $ | 1,034,684 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Noninterest-bearing demand
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$ | 210,758 | $ | 195,265 | ||
NOW, MMDA & savings
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407,504 | 386,893 | ||||
Time, $100,000 or more
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106,453 | 115,268 | ||||
Other time
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89,985 | 101,935 | ||||
Total deposits
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814,700 | 799,361 | ||||
Securities sold under agreements to repurchase
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48,430 | 45,396 | ||||
FHLB borrowings
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50,000 | 65,000 | ||||
Junior subordinated debentures
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20,619 | 20,619 | ||||
Accrued interest payable and other liabilities
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8,080 | 20,589 | ||||
Total liabilities
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941,829 | 950,965 | ||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; issued and outstanding
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12,524 shares at 9/30/13
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- | - | ||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,612,588 shares at 12/31/14 and
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5,613,495 shares at 12/31/13
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48,088 | 48,133 | ||||
Retained earnings
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45,124 | 36,758 | ||||
Accumulated other comprehensive income (loss)
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5,453 | (1,172 | ) | |||
Total shareholders' equity
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98,665 | 83,719 | ||||
Total liabilities and shareholders' equity
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$ | 1,040,494 | $ | 1,034,684 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three months and years ended December 31, 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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Years ended
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December 31,
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December 31,
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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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$ | 7,749 | $ | 7,523 | $ | 30,305 | $ | 30,194 | ||||
Interest on due from banks
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23 | 23 | 65 | 85 | ||||||||
Interest on investment securities:
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U.S. Government sponsored enterprises
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697 | 669 | 2,995 | 1,639 | ||||||||
State and political subdivisions
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1,163 | 1,194 | 4,677 | 4,427 | ||||||||
Other
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85 | 86 | 378 | 351 | ||||||||
Total interest income
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9,717 | 9,495 | 38,420 | 36,696 | ||||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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124 | 154 | 499 | 732 | ||||||||
Time deposits
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264 | 365 | 1,188 | 1,650 | ||||||||
FHLB borrowings
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516 | 604 | 2,166 | 2,518 | ||||||||
Junior subordinated debentures
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98 | 99 | 389 | 398 | ||||||||
Other
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12 | 12 | 45 | 55 | ||||||||
Total interest expense
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1,014 | 1,234 | 4,287 | 5,353 | ||||||||
NET INTEREST INCOME
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8,703 | 8,261 | 34,133 | 31,343 | ||||||||
PROVISION FOR LOAN LOSSES
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(672 | ) | 419 | (699 | ) | 2,584 | ||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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9,375 | 7,842 | 34,832 | 28,759 | ||||||||
NON-INTEREST INCOME:
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Service charges
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1,307 | 1,233 | 4,961 | 4,566 | ||||||||
Other service charges and fees
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188 | 272 | 1,080 | 1,172 | ||||||||
Gain on sale of securities
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- | - | 266 | 614 | ||||||||
Mortgage banking income
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256 | 228 | 804 | 1,228 | ||||||||
Insurance and brokerage commissions
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180 | 183 | 701 | 661 | ||||||||
Miscellaneous
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1,075 | 888 | 4,352 | 4,411 | ||||||||
Total non-interest income
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3,006 | 2,804 | 12,164 | 12,652 | ||||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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4,747 | 4,237 | 17,530 | 16,851 | ||||||||
Occupancy
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1,775 | 1,551 | 6,251 | 5,539 | ||||||||
Other
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4,419 | 3,446 | 11,890 | 10,451 | ||||||||
Total non-interest expense
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10,941 | 9,234 | 35,671 | 32,841 | ||||||||
EARNINGS BEFORE INCOME TAXES
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1,440 | 1,412 | 11,325 | 8,570 | ||||||||
INCOME TAXES
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(376 | ) | 31 | 1,937 | 1,879 | |||||||
NET EARNINGS
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1,816 | 1,381 | 9,388 | 6,691 | ||||||||
Dividends and accretion on preferred stock
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- | 186 | - | 656 | ||||||||
NET EARNINGS AVAILABLE TO
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COMMON SHAREHOLDERS
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$ | 1,816 | $ | 1,195 | $ | 9,388 | $ | 6,035 | ||||
PER COMMON SHARE AMOUNTS
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Basic net earnings
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$ | 0.32 | $ | 0.21 | $ | 1.67 | $ | 1.08 | ||||
Diluted net earnings
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$ | 0.32 | $ | 0.21 | $ | 1.66 | $ | 1.07 | ||||
Cash dividends
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$ | 0.06 | $ | 0.03 | $ | 0.18 | $ | 0.12 | ||||
Book value
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$ | 17.58 | $ | 14.91 | $ | 17.58 | $ | 14.91 |
FINANCIAL HIGHLIGHTS
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For the three months and years ended December 31, 2014 and 2013
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(Dollars in thousands)
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Three months ended
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Years ended
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December 31,
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December 31,
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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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$ | 272,768 | $ | 300,433 | $ | 287,371 | $ | 293,770 | ||||
Loans
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648,355 | 616,920 | 631,025 | 614,532 | ||||||||
Earning assets
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962,515 | 960,687 | 949,537 | 950,451 | ||||||||
Assets
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1,054,504 | 1,040,563 | 1,036,486 | 1,023,609 | ||||||||
Deposits
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824,706 | 800,212 | 808,399 | 787,640 | ||||||||
Shareholders' equity
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97,334 | 97,271 | 95,759 | 100,275 | ||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.83% | 3.66% | 3.84% | 3.53% | ||||||||
Return on average assets
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0.68% | 0.53% | 0.91% | 0.65% | ||||||||
Return on average shareholders' equity
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7.40% | 5.63% | 9.80% | 6.67% | ||||||||
Shareholders' equity to total assets (period end)
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9.48% | 8.09% | 9.48% | 8.09% | ||||||||
CORE EARNINGS ANALYSIS:
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Income Before Taxes (GAAP)
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1,440 | 1,412 | 11,325 | 8,570 | ||||||||
Adjustments:
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Loss on sale and write-down of other real estate
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238 | 298 | 622 | 581 | ||||||||
Gain on sale of securities
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- | - | (266 | ) | (614 | ) | ||||||
NC tax credit amortization expense
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653 | 160 | 870 | 160 | ||||||||
Prepayment penalties on FHLB borrowings
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869 | 530 | 869 | 530 | ||||||||
Provision for loan losses
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(672 | 419 | (699 | ) | 2,584 | |||||||
Core earnings before provision for loan losses and income taxes
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2,528 | 2,819 | 12,721 | 11,811 | ||||||||
Provision for loan losses
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(672 | 419 | (699 | ) | 2,584 | |||||||
Core earnings before taxes
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3,200 | 2,400 | 13,420 | 9,227 | ||||||||
Income tax calculation (1)
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496 | 392 | 3,193 | 2,025 | ||||||||
Core earnings
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2,704 | 2,008 | 10,227 | 7,202 | ||||||||
(1) Income tax calculation reflects the following estimated effective tax rates excluding NC tax credits:
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Effective tax rates
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15.51% | 16.35% | 23.79% | 21.95% | ||||||||
* This table includes non-GAAP financial measures that management believes are useful for evaluating our financial condition and performance over periods of time, as well as in managing and evaluating our business and in discussions about our performance. We also believe these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods. These results should not be viewed as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that other companies may use.
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ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 12,344 | $ | 13,854 | $ | 13,501 | $ | 14,423 | ||||
Provision for loan losses
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(672 | 419 | (699 | ) | 2,584 | |||||||
Charge-offs
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(718 | (888 | ) | (2,637 | ) | (4,372 | ) | |||||
Recoveries
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128 | 116 | 917 | 866 | ||||||||
Balance, end of period
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$ | 11,082 | $ | 13,501 | $ | 11,082 | $ | 13,501 | ||||
ASSET QUALITY:
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Non-accrual loans
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$ | 10,729 | $ | 13,836 | ||||||||
90 days past due and still accruing
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- | 882 | ||||||||||
Other real estate owned
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2,016 | 1,679 | ||||||||||
Total non-performing assets
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$ | 12,745 | $ | 16,397 | ||||||||
Non-performing assets to total assets
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1.22% | 1.58% | ||||||||||
Allowance for loan losses to non-performing assets
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86.95% | 82.34% | ||||||||||
Allowance for loan losses to total loans
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1.70% | 2.17% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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12/31/2014
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12/31/2013
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Risk Grade 1 (excellent quality)
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2.18%
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2.40%
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Risk Grade 2 (high quality)
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22.30%
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18.82%
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Risk Grade 3 (good quality)
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50.76%
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49.49%
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Risk Grade 4 (management attention)
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16.54%
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18.69%
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Risk Grade 5 (watch)
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4.62%
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5.05%
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Risk Grade 6 (substandard)
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3.30%
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5.25%
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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 December 31, 2014, including non-accrual loans, there were six relationships exceeding $1.0 million in the Watch risk grade (which totaled $14.2 million) and two relationships exceeding $1.0 million in the Substandard risk grade (which totaled $4.7 million). There was one relationship with loans in both the Watch and Substandard risk grades, which totaled $1.3 million for loans in both risk grades combined.
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(END)
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