PeoplesBancorp
2 0 2 0 A n n u a l R e p o r t
Our Core Values:
Employees
We are informed,
encouraged, and committed.
Integrity
We are fair and truthful.
Exceptional Customer Service
We surpass our customers’
expectations.
Accountability
We are accountable for our own
actions and bank goals.
Our community recently lost an
exceptional member. Christine Sigmon
“Teen” Abernethy died on November 30,
2020 at age 94. She was a devoted mother
to her sons and a loving wife to Julius (J.W.)
Abernethy, Jr. who served on the Board of
Peoples Bank from January 1962 until his
death on December 11, 1991.
Mrs. Abernethy was the principal
shareholder of Peoples Bank and a
dedicated supporter of the bank and the
Progressive and Positive
Table of Contents
Message from the President
Report of Independent Registered Public Accounting Firm
Financial Highlights
Consolidated Balance Sheets
Consolidated Statements of Earnings
We see change as an opportunity.
Executive Leadership Team
communities we serve. She continued to
be involved in her family’s business as
the chairwoman of Carolina Glove Co. and
serving on the board of Carolina Mills. We
offer our condolences to the family of Mrs.
Abernethy as we applaud her extraordinary
contributions to our community.
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From the President
While in the past year we experienced unexpected challenges, brought on by the
COVID-19 pandemic, Peoples Bank remained committed to serving our communities.
Despite the disruptions of the last year, I’m pleased to present this 2020 Annual Report
of business activity on behalf of Peoples Bancorp of North Carolina, Inc. In its 108th
consecutive year of being presented, this report reflects the exceptional dedication
and commitment of our employees. Through their commitment to service, this
company continues to positively impact the lives of our customers while strengthening
our collective communities.
Year-to-date highlights are as follows:
• Net earnings were $11.4 million or $1.95 basic and diluted net earnings per share for
the year ended December 31, 2020, as compared to $14.1 million or $2.37 basic net
earnings per share and $2.36 diluted net earnings per share for the same period
one year ago.
• Total loans increased $98.7 million to $948.6 million at Decemember 31, 2020,
compared to $849.9 million at December 31, 2019.
• The Bank originated 1,127 Small Business Administration (SBA) Paycheck Protection
Program (PPP) loans, totaling $99.0 million, during the year ended December 31,
2020. The Bank has received $4 million in fees from the SBA for PPP for loans
originated as of December 31, 2020. The Bank has recognized $1.4 million PPP loan
fee income as of December 31, 2020.
• Core deposits were $1.2 billion or 97.89% of total deposits at December 31, 2020,
compared to $932.2 million or 96.45% of total deposits at December 31, 2019.
Our customers trust us to deliver exceptional service and solutions that help support
them in their lives and with their businesses. We thank our team of employees for the
trust our customers place in us. Your work ethic and resilience embody our mission of
striving to be exceptional in how we serve.
We remain committed to providing exceptional customer service, while maintaining
our bank’s integrity. We’re also proud to continue to be a well-capitalized bank, with
strong earnings and operating standards. Peoples Bank strives to never lose sight
of the core values upon which our bank is founded. We thank our shareholders for
your support, appreciate our board of directors for their leadership, and value our
employees who uphold these commitments on a daily basis.
“Believing
in our
communities
and having
the capabilities
to support them
has resulted in
a great year.”
2 0 2 0 A n n u a l R e p o r t
- Deploying a large portion of our employees to work remotely to allow for appropriate social distancing and expanded
safety measures in our Corporate and branch locations.
- Installing partitions to support face to face service interactions.
- Enhancing safety protocols and sanitation measures throughout the bank for the safety of our employees and
customers.
- Extending payment adjustments and broad scale fee exceptions to assist in alleviating financial pressure from
customers.
- Assisting local businesses in the PPP program and continue to work closely with these customers as a partner for them
throughout the process.
• We made the following changes in our Executive Team:
- Jeff Hooper joined Peoples Bank in March 2020 as our CFO, with the planned retirement of Joe Lampron in June 2020. Jeff
came to the bank with an extensive background in both accounting and the financial services industry and has been a
valuable addition to our team.
- Kim Boyd Leaks, Jim Perry and Tim Turner were each promoted to Executive Vice President.
• Our new Raleigh office opened in August 2020 and is prepared to fully service both retail and commercial customers.
The Directors of Peoples Bancorp are instrumental to the success of our company. Their continued dedication to Peoples
Bank is a consistent reminder for us to deliver on our mission. Please join me in thanking them for their hard work and
commitment.
In addition to the Bank, which operates as a wholly owned subsidiary of the Company, we would like to remind you of our
three subsidiary companies:
Peoples Investment Services, Inc., licensed financial advisors who provide access to investment products, which include
stocks, bonds, mutual funds, annuities, and other suitable monetary investments through our affiliation with Raymond
James Financial Services, Inc.
Real Estate Advisory Services, Inc., which provides real estate appraisals (both residential and commercial) to the Peoples
Bank market area, thereby becoming a valued partner with respect to mortgage-related transactions.
Community Bank Real Estate Solutions, LLC, assists community banks across the country with appraisal management
services.
We hope you will continue to recommend our Bank and subsidiary companies to members of your communities.
Here is a recap of some of our more noteworthy achievements and announcements
this year.
Sincerely,
• The COVID-19 pandemic presented the bank with challenges and opportunities. We
are proud of our employees for overcoming obstacles, supporting each other, and
serving our customers. Our bank was quick to respond to these unprecedented
times by implementing measures that included:
Lance A. Sellers
President and Chief Executive Officer
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Financial Highlights
Dollars in Thousands Except Per Share Amounts
Interest income
Interest expense
Net interest earnings
Provision for loan losses
Net interest earnings after provision for loan losses
Non-interest income
Non-interest expense
Income taxes
Net earnings
Per Share of Common Stock
Basic net earnings
Diluted net earnings
Cash dividends
Market price at December 31
Book value at December 31
At Year-end
Loans, net
Available for sale securities
Assets
Deposits
Shareholders’ equity
Key Performance Ratios
Return on average assets
Return on average shareholders’ equity
Dividend payout ratio
Average shareholders’ equity to total average assets
$
$
$
$
2 020
47,958
3,836
44,122
4,259
39,863
22,914
48,931
2,489
11,357
1.95
1.95
0.75
23.02
24.17
938,731
245,249
1,414,855
1,221,086
139,899
0.83%
8.04%
38.67%
10.35%
2 0 2 0 A n n u a l R e p o r t
2019
Change
-3%
2%
-4%
394%
-11%
29%
8%
-21%
-19%
-18%
-17%
14%
-30%
7%
11%
25%
23%
26%
4%
49,601
3,757
45,844
863
44,981
17,739
45,517
3,136
14,067
2.37
2.36
0.66
32.85
22.68
843,194
195,746
1,154,882
966,517
134,120
1.23%
10.45%
28.00%
11.78%
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Peoples Bancorp of North Carolina, Inc.
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Peoples Bancorp of North Carolina, Inc. as of December 31, 2020
and 2019, and the related consolidated statements of earnings, comprehensive income, changes in
shareholders' equity and cash flows for each of the three years in the period ended December 31, 2020 (not
presented herein); and in our report, dated March 19, 2021, we expressed an unqualified opinion on those
consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed consolidated financial statements is
fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been
derived.
Charlotte, North Carolina
March 19, 2021
elliottdavis.com
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Consolidated Balance Sheets
December 31, 2020 and December 31, 2019
Consolidated Statements of Earnings
For the Years Ended December 31, 2020, 2019 and 2018
2 0 2 0 A n n u a l R e p o r t
December 31,
December 31,
2020
(Audited)
42,737
118,843
-
161,580
245,249
4,155
249,404
9,139
948,639
(9,908)
938,731
18,600
16,968
128
3,423
16,882
2 019
(Audited)
48,337
720
3,330
52,387
195,746
4,231
199,977
4,417
849,874
(6,680)
843,194
18,604
16,319
-
3,622
16,362
(Dollars in thousands, except per share amounts)
Interest income:
Interest and fees on loans
Interest on due from banks
Interest on federal funds sold
Interest on investment securities:
U.S. Government sponsored enterprises
States and political subdivisions
Other
Total interest income
Interest expense:
NOW, MMDA & savings deposits
Time deposits
FHLB borrowings
Junior subordinated debentures
Other
Total interest expense
Net interest income
Provision for loan losses
$
1,414,855
1,154,882
Net interest income after provision for loan losses
(Dollars in thousands)
Assets
Cash and due from banks, including reserve requirements
of $0 at 12/31/20 and $13,210 at 12/31/19
$
Interest-bearing deposits
Federal funds sold
Cash and cash equivalents
Investment securities available for sale
Other investments
Total securities
Mortgage loans held for sale
Loans
Less allowance for loan losses
Net loans
Premises and equipment, net
Cash surrender value of life insurance
Other real estate
Right of use lease asset
Accrued interest receivable and other assets
Total assets
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand
NOW, MMDA & savings
Time, $250,000 or more
Other time
Total deposits
Securities sold under agreements to repurchase
Junior subordinated debentures
Lease liability
Accrued interest payable and other liabilities
Total liabilities
Commitments
Shareholders’ equity:
$
456,980
657,834
25,771
80,501
1,221,086
26,201
15,464
3,471
8,734
338,004
516,757
34,269
77,487
966,517
24,221
15,619
3,647
10,758
1,274,956
1,020,762
Preferred stock, no par value; authorized
5,000,000 shares; no shares issued and outstanding
Common stock, no par value; authorized
20,000,000 shares; issued and outstanding 5,787,504 shares
at December 31, 2020 and 5,912,300 shares at December 31, 2019
Retained earnings
Accumulated other comprehensive income
Total shareholders’ equity
Total liabilities and shareholders’ equity
-
-
56,871
77,628
5,400
139,899
$
1,414,855
59,813
70,663
3,644
134,120
1,154,882
See accompanying Notes to Consolidated Financial Statements.
See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement, dated March 24, 2021, for a complete set of Consolidated Financial Statements
Non-interest income:
Service charges
Other service charges and fees
Gain on sale of securities
Mortgage banking income
Insurance and brokerage commissions
Appraisal management fee income
Gain (loss) on sales and write-downs of other real estate, net
Miscellaneous
Total non-interest income
Non-interest expense:
Salaries and employee benefits
Occupancy
Professional fees
Advertising
Debit card expense
FDIC insurance
Appraisal management fee expense
Other
Total non-interest expense
Earnings before income taxes
Income tax expense
Net earnings
Basic net earnings per share
Diluted net earnings per share
Cash dividends declared per share
2 020
$
42,314
127
204
2,361
2,691
261
47,958
1,962
947
357
370
200
3,836
44,122
4,259
39,863
3,528
742
2,639
2,469
897
6,754
(47)
5,932
2019
43,301
213
331
2,670
2,915
171
49,601
1,596
909
205
844
203
3,757
45,844
863
44,981
4,576
714
226
1,264
877
4,484
(11)
5,609
22,914
17,739
23,538
7,933
1,580
787
1,012
263
5,274
8,544
48,931
13,846
2,489
11,357
1.95
1.95
0.75
$
$
$
$
23,238
7,364
1,490
1,021
890
119
3,421
7,974
45,517
17,203
3,136
14,067
2.37
2.36
0.66
2018
38,654
304
-
2,333
3,877
182
45,350
769
472
-
790
115
2,146
43,204
790
42,414
4,355
705
15
851
824
3,206
17
6,193
16,166
21,530
7,170
1,525
922
994
328
2,460
7,645
42,574
16,006
2,624
13,382
2.23
2.22
0.52
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See accompanying Notes to Consolidated Financial Statements.
See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement, dated March 24, 2021, for a complete set of Consolidated Financial Statements.
Executive Leadership Team
Lance Sellers
President & CEO
Jeffrey Hooper
EVP, Chief Financial Officer
Finance, Internal Audit, Investment Services
Bill Cable
EVP, Chief Operating Officer
BSA, Compliance, Deposit Operations, Digital
Banking Services, Information Technology,
Loan Operations, Treasury Management,
Mortgage Department, Mail Courier Services
Kim Boyd Leaks
EVP, Chief Retail Banking Support Officer
Retail Sales Support, CRM Administrations,
Human Resources, Learning & Development,
Marketing, Service Center
Peoples Bank
and Peoples Bancorp
Board of Directors
Robert C. Abernethy
Chairman of the Board
Peoples Bancorp of North Carolina,
Inc. and Peoples Bank
President, Secretary and Treasurer
Carolina Glove Company, Inc.
James S. Abernethy
President and Assistant Secretary
Midstate Contractors, Inc.
Douglas S. Howard
Vice President and Treasurer
Denver Equipment Company of
Charlotte, Inc.
John W. Lineberger, Jr.
President
Lincoln Bonded Warehouse Company
Gary E. Matthews
President and Director
Matthews Construction Company, Inc.
Billy L. Price, Jr., M.D.
Practitioner of Internal Medicine
BL Price Jr Medical Consultants, PLLC
Larry E. Robinson
Chairman of the Board
and Chief Executive Officer
The Blue Ridge Distributing
Company, Inc.
W. Gregory Terry
President
Hole-In-One Advantage, LLC
Director/Consultant
Drum & Willis-Reynolds
Funeral Homes & Crematory
Dan Ray Timmerman, Sr.
Chairman of the Board and
Chief Executive Officer
Timmerman Manufacturing, Inc.
Benjamin I. Zachary
President, Treasurer,
General Manager and Director
Alexander Railroad Company
Jim Perry
EVP, Chief Retail Banking Officer
Tim Turner
EVP, Chief Credit Officer
Retail Banking Centers, Mortgage Sales
Commercial Credit, Consumer Credit
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2 0 2 0 A n n u a l R e p o r t
Peoples Bank Subsidiaries’
Board of Directors and Officers
Shareholder and
General Information
Community Bank Real Estate Solutions, LLC
Board of Directors
Officers
Robert C. Abernethy
David E. Reitzel
Dan Ray Timmerman, Sr.
Lance A. Sellers
David E. Reitzel
President
Lance A. Sellers
Vice President
John Noonan
Vice President
Krissy O. Price
Secretary
Jeffrey N. Hooper
Treasurer
Peoples Investment Services, Inc.
Board of Directors
Officers
Robert C. Abernethy
Billy L. Price, Jr., M.D.
David C. Brown
Larry E. Robinson
Douglas S. Howard
Lance A. Sellers
William D. Cable, Sr.
David C. Brown
President
Lance A. Sellers
Vice President and
Assistant Secretary
Krissy O. Price
Secretary
Jeffrey N. Hooper
Treasurer
Real Estate Advisory Services, Inc.
Board of Directors
Officers
Robert C. Abernethy
Dan Ray Timmerman, Sr.
David E. Reitzel
Lance A. Sellers
David E. Reitzel
President
Lance A. Sellers
Vice President
John Noonan
Vice President
Krissy O. Price
Secretary
Jeffrey N. Hooper
Treasurer
Annual Meeting
This year, out of an abundance of caution and to continue to deal
with the unprecedented health impact of COVID-19, the Annual
Meeting of Shareholders of Peoples Bancorp will be conducted in
a virtual-only format at 11:00 a.m. on Thursday, May 6, 2021.
Common Stock
Peoples Bancorp common stock is listed on the NASDAQ (National
Association of Securities Dealers Automated Quotations) Global Market,
where our symbol is PEBK.
Dividend Reinvestment & Stock Purchase
Peoples Bancorp offers a Dividend Reinvestment and Stock
Purchase Plan for the benefit of the Company’s shareholders. The
Plan provides for the full or partial reinvestment of cash dividends,
optional cash purchases of the Company’s stock, safekeeping of
the share certificates, liquidation of shares, and gifting of shares
and enrollment of the designated recipients.
Broadridge Corporate Issuer Solutions, Inc. is the Plan Administrator.
For more information, one may call Peoples Bancorp at 828-464-5620
or 800-948-7195 or contact the Plan Administrator at 855-263-4988.
Shareholders of Peoples Bancorp are entitled to receive dividends
when and as declared by the Board of Directors out of funds legally
available therefore.
Such dividend payments are declared based upon the guidelines of
North Carolina and federal banking law.
Corporate Office
Peoples Bancorp of North Carolina, Inc.
518 West C Street
PO Box 467
Newton, NC 28658
828-464-5620
Stock Transfer Agent & Registrar
Broadridge Corporate Issuer Solutions, Inc.
P.O. Box 1342
Brentwood, NY 11717
www.broadridge.com
Independent Auditors
Elliott Davis, PLLC
500 East Morehead Street, Suite 700
Charlotte, NC 28202
Our Promise
We strive to be exceptional
and inspire others to be
exceptional too.
Our Vision
To be the bank that’s
exceptional at serving
our communities, including
employees, customers
and shareholders.
Our Mission
To provide exceptional
customer service while
selling to customer needs.
PeoplesBankNC.com