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 23, 2017
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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 23, 2017
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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 23, 2017
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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 23, 2017
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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 23, 2017
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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 $1.3 million or $0.24 basic and diluted net earnings per share for the three months ended December 31, 2016, as compared to $2.2 million or $0.40 basic net earnings per share and $0.39 diluted net earnings per share for the same period one year ago.
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·
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Prepaid $23.5 million FHLB borrowings with weighted average rate of 4.28%. A prepayment penalty of $1.3 million, which is included in other non-interest expenses, was incurred as the result of prepaying $23.5 million in FHLB borrowings.
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·
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Net earnings were $9.2 million or $1.68 basic net earnings per share and $1.65 diluted net earnings per share for the year ended December 31, 2016, as compared to $9.6 million or $1.73 basic net earnings per share and $1.72 diluted net earnings per share for the same period one year ago.
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·
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Non-performing assets declined to $4.1 million or 0.4% of total assets at December 31, 2016, compared to $9.1 million or 0.9% of total assets at December 31, 2015.
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·
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Total loans increased $34.7 million to $723.8 million at December 31, 2016, compared to $689.1 million at December 31, 2015.
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·
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Core deposits were $865.4 million or 96.9% of total deposits at December 31, 2016, compared to $805.0 million or 96.7% of total deposits at December 31, 2015.
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·
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2016 non-interest expense reflects the following non-recurring expenses totaling $2.8 million:
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o
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$1.5 million consulting fees associated with the FDIC Consent Order (the "Order") issued in August 2015.
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o
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$1.3 million penalties on FHLB borrowing prepayments.
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CONSOLIDATED BALANCE SHEETS
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December 31, 2016 and 2015
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(Dollars in thousands)
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December 30, 2016
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December 31, 2015
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(Unaudited)
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(Audited)
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|||||||
ASSETS:
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Cash and due from banks
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$
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53,613
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$
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29,194
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Interest-bearing deposits
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16,481
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10,569
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Cash and cash equivalents
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70,094
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39,763
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Investment securities available for sale
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249,946
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268,530
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Other investments
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2,635
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3,636
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Total securities
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252,581
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272,166
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Mortgage loans held for sale
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5,709
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4,149
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Loans
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723,811
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689,091
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Less: Allowance for loan losses
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(7,550
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)
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(9,589
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)
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Net loans
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716,261
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679,502
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Premises and equipment, net
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16,452
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16,976
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Cash surrender value of life insurance
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14,952
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14,546
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Accrued interest receivable and other assets
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11,942
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11,379
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Total assets
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$
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1,087,991
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$
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1,038,481
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LIABILITIES AND SHAREHOLDERS' EQUITY:
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Deposits:
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Noninterest-bearing demand
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$
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271,851
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$
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244,231
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NOW, MMDA & savings
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477,054
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431,052
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Time, $250,000 or more
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26,771
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26,891
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Other time
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117,242
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130,001
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Total deposits
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892,918
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832,175
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Securities sold under agreements to repurchase
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36,434
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27,874
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FHLB borrowings
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20,000
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43,500
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Junior subordinated debentures
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20,619
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20,619
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Accrued interest payable and other liabilities
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10,592
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9,449
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Total liabilities
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980,563
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933,617
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Shareholders' equity:
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Series A preferred stock, $1,000 stated value; authorized
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5,000,000 shares; no shares issued and outstanding
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-
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-
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Common stock, no par value; authorized
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20,000,000 shares; issued and outstanding
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5,417,800 shares at 12/31/16 and
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5,510,538 shares at 12/31/2015
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44,187
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46,171
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Retained earnings
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60,254
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53,183
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Accumulated other comprehensive income
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2,987
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5,510
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Total shareholders' equity
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107,428
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104,864
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Total liabilities and shareholders' equity
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$
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1,087,991
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$
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1,038,481
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CONSOLIDATED STATEMENTS OF INCOME
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For the three months and years ended December 31, 2016 and 2015
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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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2016
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2015
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2016
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2015
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Audited)
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INTEREST INCOME:
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Interest and fees on loans
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$
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8,267
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$
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8,082
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$
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32,452
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$
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31,098
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Interest on due from banks
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56
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5
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123
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26
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Interest on investment securities:
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U.S. Government sponsored enterprises
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621
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657
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2,531
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2,616
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State and political subdivisions
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1,105
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1,135
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4,454
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4,600
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Other
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57
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81
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249
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326
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Total interest income
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10,106
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9,960
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39,809
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38,666
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INTEREST EXPENSE:
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NOW, MMDA & savings deposits
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128
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109
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495
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432
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Time deposits
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133
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184
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586
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870
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FHLB borrowings
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413
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441
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1,661
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1,735
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Junior subordinated debentures
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132
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105
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485
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402
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Other
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14
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11
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44
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45
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Total interest expense
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820
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850
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3,271
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3,484
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NET INTEREST INCOME
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9,286
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9,110
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36,538
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35,182
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PROVISION FOR (REDUCTION OF PROVISION
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FOR) LOAN LOSSES
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(98
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)
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(210
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)
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(1,206
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)
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(17
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NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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9,384
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9,320
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37,744
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35,199
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NON-INTEREST INCOME:
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Service charges
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1,206
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1,149
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4,497
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4,647
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Other service charges and fees
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143
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214
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890
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931
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Gain on sale of securities
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405
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-
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729
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-
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Mortgage banking income
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340
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320
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1,428
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1,130
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Insurance and brokerage commissions
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156
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170
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632
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714
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Miscellaneous
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1,416
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1,651
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5,800
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5,890
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Total non-interest income
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3,666
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3,504
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13,976
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13,312
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NON-INTEREST EXPENSES:
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Salaries and employee benefits
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5,150
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4,602
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19,264
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18,285
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Occupancy
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1,522
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1,710
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6,765
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6,288
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Other
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5,112
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3,711
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13,953
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11,205
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||||||||||||
Total non-interest expense
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11,784
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10,023
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39,982
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35,778
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EARNINGS BEFORE INCOME TAXES
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1,266
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2,801
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11,738
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12,733
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INCOME TAXES
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(36
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)
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613
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2,561
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3,100
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NET EARNINGS
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$
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1,302
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$
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2,188
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$
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9,177
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$
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9,633
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PER SHARE AMOUNTS
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Basic net earnings
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$
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0.24
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$
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0.40
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$
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1.68
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$
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1.73
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Diluted net earnings
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$
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0.24
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$
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0.39
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$
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1.65
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$
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1.72
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Cash dividends
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$
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0.10
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$
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0.08
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$
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0.38
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$
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0.28
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Book value
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$
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19.83
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$
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19.03
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$
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19.83
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$
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19.03
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FINANCIAL HIGHLIGHTS
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For the three months and years ended December 31, 2016 and 2015
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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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2016
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2015
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2016
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2015
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Audited)
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|||||||||||||
SELECTED AVERAGE BALANCES:
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Available for sale securities
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$
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248,525
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$
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261,512
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$
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252,725
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$
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266,830
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Loans
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718,884
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687,592
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703,484
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669,628
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Earning assets
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1,014,156
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951,843
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985,236
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952,251
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Assets
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1,112,191
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1,043,587
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1,076,604
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1,038,594
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Deposits
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880,955
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819,638
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856,313
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816,628
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Shareholders' equity
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109,286
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105,122
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113,196
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106,644
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SELECTED KEY DATA:
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Net interest margin (tax equivalent)
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3.86
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%
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3.99
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%
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3.94
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%
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3.94
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%
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||||||||
Return on average assets
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0.47
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%
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0.83
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%
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0.85
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%
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0.93
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%
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||||||||
Return on average shareholders' equity
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4.74
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%
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8.26
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%
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8.11
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%
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9.03
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%
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||||||||
Shareholders' equity to total assets (period end)
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9.87
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%
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10.10
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%
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9.87
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%
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10.10
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%
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||||||||
ALLOWANCE FOR LOAN LOSSES:
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||||||||||||||||
Balance, beginning of period
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$
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8,045
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$
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10,420
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$
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9,589
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$
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11,082
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||||||||
Provision for loan losses
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(98
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)
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(210
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)
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(1,206
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)
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(17
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)
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Charge-offs
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(484
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)
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(668
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)
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(1,238
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)
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(1,844
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)
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||||||||
Recoveries
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87
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47
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405
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368
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||||||||||||
Balance, end of period
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$
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7,550
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$
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9,589
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$
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7,550
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$
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9,589
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||||||||
ASSET QUALITY:
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||||||||||||||||
Non-accrual loans
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$
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3,825
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$
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8,432
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||||||||||||
90 days past due and still accruing
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-
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17
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||||||||||||||
Other real estate owned
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283
|
739
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||||||||||||||
Total non-performing assets
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$
|
4,108
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$
|
9,188
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||||||||||||
Non-performing assets to total assets
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0.38
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%
|
0.88
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%
|
||||||||||||
Allowance for loan losses to non-performing assets
|
183.79
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%
|
104.36
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%
|
||||||||||||
Allowance for loan losses to total loans
|
1.04
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%
|
1.39
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%
|
LOAN RISK GRADE ANALYSIS:
|
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Percentage of Loans
|
||||||||||
By Risk Grade
|
||||||||||
12/31/2016
|
12/31/2015
|
|||||||||
Risk Grade 1 (excellent quality)
|
1.32%
|
1.66%
|
||||||||
Risk Grade 2 (high quality)
|
26.82%
|
24.40%
|
||||||||
Risk Grade 3 (good quality)
|
55.10%
|
53.64%
|
||||||||
Risk Grade 4 (management attention)
|
11.99%
|
14.26%
|
||||||||
Risk Grade 5 (watch)
|
3.07%
|
3.26%
|
||||||||
Risk Grade 6 (substandard)
|
1.40%
|
2.53%
|
||||||||
Risk Grade 7 (doubtful)
|
0.00%
|
0.00%
|
||||||||
Risk Grade 8 (loss)
|
0.00%
|
0.00%
|
||||||||
At December 31, 2016, including non-accrual loans, there were four relationships exceeding $1.0 million in the Watch risk grade (which totaled $7.2 million) and one relationship exceeding $1.0 million in the Substandard risk grade (which totaled $1.3 million).
|
||||||||||
(END)
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