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 19, 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 October 19, 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 October 19, 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: October 19, 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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October 19, 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 $2.5 million or $0.45 basic and diluted net earnings per share for the three months ended September 30, 2015, as compared to $2.4 million or $0.43 basic and diluted basic and diluted net earnings per share for the same period one year ago.
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·
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Net earnings were $7.4 million or $1.34 basic net earnings per share and $1.32 diluted net earnings per share for the nine months ended September 30, 2015, as compared to $7.6 million or $1.35 basic net earnings per share and $1.34 diluted net earnings per share for the same period one year ago.
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Non-performing assets declined to $10.8 million or 1.0% of total assets at September 30, 2015, compared to $12.6 million or 1.2% of total assets at September 30, 2014.
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Total loans increased $34.2 million to $684.8 million at September 30, 2015, compared to $650.6 million at September 30, 2014.
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Core deposits were $771.4 million or 95.7% of total deposits at September 30, 2015, compared to $757.2 million or 92.7% of total deposits at September 30, 2014.
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CONSOLIDATED BALANCE SHEETS
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September 30, 2015, December 31, 2014 and September 30, 2014
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(Dollars in thousands)
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September 30, 2015
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December 31, 2014
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September 30, 2014
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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Cash and due from banks
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$ | 39,681 | $ | 51,213 | $ | 34,887 | |||
Interest-bearing deposits
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4,944 | 17,885 | 50,636 | ||||||
Cash and cash equivalents
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44,625 | 69,098 | 85,523 | ||||||
Investment securities available for sale
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268,821 | 281,099 | 279,787 | ||||||
Other investments
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3,912 | 4,031 | 4,706 | ||||||
Total securities
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272,733 | 285,130 | 284,493 | ||||||
Mortgage loans held for sale
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1,679 | 1,375 | 887 | ||||||
Loans
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684,800 | 651,891 | 650,550 | ||||||
Less: Allowance for loan losses
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(10,420 | ) | (11,082 | ) | (12,343 | ) | |||
Net loans
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674,380 | 640,809 | 638,207 | ||||||
Premises and equipment, net
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16,831 | 17,000 | 17,482 | ||||||
Cash surrender value of life insurance
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14,440 | 14,125 | 14,020 | ||||||
Accrued interest receivable and other assets
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12,507 | 12,957 | 13,323 | ||||||
Total assets
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$ | 1,037,195 | $ | 1,040,494 | $ | 1,053,935 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Noninterest-bearing demand
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$ | 217,517 | $ | 210,758 | $ | 211,832 | |||
NOW, MMDA & savings
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423,917 | 407,504 | 403,240 | ||||||
Time, $250,000 or more
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31,036 | 47,872 | 48,694 | ||||||
Other time
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134,091 | 148,566 | 153,029 | ||||||
Total deposits
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806,561 | 814,700 | 816,795 | ||||||
Securities sold under agreements to repurchase
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47,240 | 48,430 | 47,020 | ||||||
FHLB borrowings
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50,000 | 50,000 | 65,000 | ||||||
Junior subordinated debentures
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20,619 | 20,619 | 20,619 | ||||||
Accrued interest payable and other liabilities
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9,868 | 8,080 | 8,294 | ||||||
Total liabilities
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934,288 | 941,829 | 957,728 | ||||||
Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; no shares issued and outstanding
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- | - | - | ||||||
Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,528,538 shares at 9/30/15, 5,612,588 shares
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at 12/31/14 and 5,617,125 shares at 9/30/14
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46,512 | 48,088 | 48,170 | ||||||
Retained earnings
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51,442 | 45,124 | 43,648 | ||||||
Accumulated other comprehensive income
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4,953 | 5,453 | 4,389 | ||||||
Total shareholders' equity
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102,907 | 98,665 | 96,207 | ||||||
Total liabilities and shareholders' equity
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$ | 1,037,195 | $ | 1,040,494 | $ | 1,053,935 |
CONSOLIDATED STATEMENTS OF INCOME
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For the three and nine months ended September 30, 2015 and 2014
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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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2015
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2014
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2015
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2014
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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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$ | 8,089 | $ | 7,664 | $ | 23,015 | $ | 22,556 | ||||
Interest on due from banks
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4 | 18 | 21 | 42 | ||||||||
Interest on investment securities:
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U.S. Government sponsored enterprises
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633 | 646 | 1,959 | 2,298 | ||||||||
State and political subdivisions
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1,145 | 1,168 | 3,465 | 3,514 | ||||||||
Other
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76 | 87 | 245 | 294 | ||||||||
Total interest income
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9,947 | 9,583 | 28,705 | 28,704 | ||||||||
INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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106 | 124 | 324 | 375 | ||||||||
Time deposits
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211 | 287 | 685 | 924 | ||||||||
FHLB borrowings
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443 | 556 | 1,294 | 1,650 | ||||||||
Junior subordinated debentures
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101 | 98 | 297 | 291 | ||||||||
Other
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13 | 11 | 34 | 33 | ||||||||
Total interest expense
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874 | 1,076 | 2,634 | 3,273 | ||||||||
NET INTEREST INCOME
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9,073 | 8,507 | 26,071 | 25,431 | ||||||||
PROVISION FOR (REDUCTION OF PROVISION
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FOR) LOAN LOSSES
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235 | 256 | 193 | (27 | ) | |||||||
NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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8,838 | 8,251 | 25,878 | 25,458 | ||||||||
NON-INTEREST INCOME:
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Service charges
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1,193 | 1,303 | 3,498 | 3,655 | ||||||||
Other service charges and fees
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173 | 213 | 718 | 892 | ||||||||
Gain on sale of securities
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- | 240 | - | 266 | ||||||||
Mortgage banking income
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300 | 256 | 810 | 548 | ||||||||
Insurance and brokerage commissions
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179 | 161 | 544 | 521 | ||||||||
Miscellaneous
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1,421 | 1,034 | 4,238 | 3,276 | ||||||||
Total non-interest income
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3,266 | 3,207 | 9,808 | 9,158 | ||||||||
NON-INTEREST EXPENSES:
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Salaries and employee benefits
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4,596 | 4,301 | 13,683 | 12,784 | ||||||||
Occupancy
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1,611 | 1,489 | 4,577 | 4,476 | ||||||||
Other
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2,462 | 2,751 | 7,494 | 7,471 | ||||||||
Total non-interest expense
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8,669 | 8,541 | 25,754 | 24,731 | ||||||||
EARNINGS BEFORE INCOME TAXES
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3,435 | 2,917 | 9,932 | 9,885 | ||||||||
INCOME TAXES
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942 | 475 | 2,487 | 2,313 | ||||||||
NET EARNINGS
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$ | 2,493 | $ | 2,442 | $ | 7,445 | $ | 7,572 | ||||
PER SHARE AMOUNTS
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Basic net earnings
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$ | 0.45 | $ | 0.43 | $ | 1.34 | $ | 1.35 | ||||
Diluted net earnings
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$ | 0.45 | $ | 0.43 | $ | 1.32 | $ | 1.34 | ||||
Cash dividends
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$ | 0.08 | $ | 0.04 | $ | 0.20 | $ | 0.12 | ||||
Book value
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$ | 18.61 | $ | 17.13 | $ | 18.61 | $ | 17.13 |
FINANCIAL HIGHLIGHTS
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For the three and nine months ended September 30, 2015 and 2014
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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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2015
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2014
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2015
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2014
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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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$ | 264,371 | $ | 283,358 | $ | 268,622 | $ | 292,463 | ||||
Loans
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676,049 | 638,192 | 663,574 | 625,185 | ||||||||
Earning assets
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951,843 | 954,899 | 948,782 | 945,334 | ||||||||
Assets
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1,036,558 | 1,046,679 | 1,036,912 | 1,030,414 | ||||||||
Deposits
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810,782 | 812,438 | 815,614 | 802,904 | ||||||||
Shareholders' equity
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103,400 | 96,020 | 104,969 | 94,530 | ||||||||
SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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4.02% | 3.78% | 3.92% | 3.85% | ||||||||
Return on average assets
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0.95% | 0.93% | 0.96% | 0.98% | ||||||||
Return on average shareholders' equity
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9.57% | 10.09% | 9.48% | 10.71% | ||||||||
Shareholders' equity to total assets (period end)
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9.92% | 9.13% | 9.92% | 9.13% | ||||||||
ALLOWANCE FOR LOAN LOSSES:
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Balance, beginning of period
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$ | 10,378 | $ | 12,675 | $ | 11,082 | $ | 13,501 | ||||
Provision for loan losses
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235 | 256 | 193 | (27 | ) | |||||||
Charge-offs
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(315 | ) | (749 | ) | (1,176 | ) | (1,920 | ) | ||||
Recoveries
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122 | 161 | 321 | 789 | ||||||||
Balance, end of period
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$ | 10,420 | $ | 12,343 | $ | 10,420 | $ | 12,343 | ||||
ASSET QUALITY:
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Non-accrual loans
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$ | 8,266 | $ | 10,634 | ||||||||
90 days past due and still accruing
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226 | 120 | ||||||||||
Other real estate owned
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2,349 | 1,840 | ||||||||||
Total non-performing assets
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$ | 10,841 | $ | 12,594 | ||||||||
Non-performing assets to total assets
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1.05% | 1.19% | ||||||||||
Allowance for loan losses to non-performing assets
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96.12% | 98.01% | ||||||||||
Allowance for loan losses to total loans
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1.52% | 1.90% |
LOAN RISK GRADE ANALYSIS:
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Percentage of Loans
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By Risk Grade
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9/30/2015
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9/30/2014
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Risk Grade 1 (excellent quality)
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1.72%
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2.15%
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Risk Grade 2 (high quality)
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24.29%
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21.49%
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Risk Grade 3 (good quality)
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53.05%
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51.65%
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Risk Grade 4 (management attention)
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14.52%
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15.40%
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Risk Grade 5 (watch)
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3.71%
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4.57%
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Risk Grade 6 (substandard)
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2.47%
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4.43%
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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, 2015, including non-accrual loans, there were six relationships exceeding $1.0 million in the Watch risk grade (which totaled $13.1 million) and one relationship exceeding $1.0 million in the Substandard risk grade (which totaled $1.3 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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