PeoplesBancorp
2 0 2 1
A N N U A L
R E P O R T
Our Promise
Our Core Values:
We strive to be exceptional
Employees
and inspire others to be
exceptional too.
Our Vision
To be the bank that’s
exceptional at serving
our communities, including
We are informed,
encouraged, and committed.
Integrity
We are fair and truthful.
Exceptional Customer Service
We surpass our customers’
expectations.
Table of Contents
Message from the President
Report of Independent Registered Public Accounting Firm
employees, customers
Accountability
and shareholders.
We are accountable for our own
actions and bank goals.
Financial Highlights
Consolidated Balance Sheets
Our Mission
To provide exceptional
customer service while
selling to customer needs.
Progressive and Positive
We see change as an opportunity.
Consolidated Statements of Earnings
Our Leadership
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4
5
6
7
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From the President
Our commitment to serve with purpose last year amid the continuing disruptions
brought on by the pandemic resulted in more opportunities for Peoples Bank to
continue to do right by others—and, in return, help the Bank achieve our vision. It is a
privilege to present this 2021 Annual Report of business activity on behalf of Peoples
Bancorp of North Carolina, Inc. In its 109th consecutive year of being presented, this
report reflects the spirit, strength and quality of our employees who do extraordinary
work every day to improve the lives of our customers and assist our communities.
Year-to-date highlights are as follows:
l Net earnings were a record $15.1 million or $2.71 per share and $2.63 per diluted
share for the year ended December 31, 2021, as compared to $11.4 million or $2.01
per share and $1.95 per diluted share for the year ended December 31, 2020.
“ Responding to
l The Bank originated 419 PPP loans, totaling $29.1 million, during the year ended
December 31, 2021. The Bank recognized $3.4 million in PPP loan fee income
during the year ended December 31, 2021, as compared to $1.4 million in PPP loan
fee income for the year ended December 31, 2020
2 0 2 1 A n n u a l R e p o r t
l When you’re a stable and progressive-thinking Bank, there will be opportunities for growth. Peoples Bank opened a
new Loan Production Office in Winston-Salem on November 16, 2021. It’s exciting to be able to bring our exceptional
service, new ideas and product offerings to this new market, in addition to the many North Carolina communities we
already serve. By expanding our footprint, we can support and inspire more people, businesses and communities.
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 real estate lending.
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.
the needs of our
communities
with meaningful
solutions and
compassionate
service has
resulted
in another
successful year.”
l Core deposits were $1.4 billion or 98.14% of total deposits at December 31, 2021,
compared to $1.2 billion or 97.92% of total deposits at December 31, 2020.
Sincerely,
Lance A. Sellers
President and Chief Executive Officer
Over the years, our customers have learned to expect high standards with Peoples
Bank—from the solutions we provide to the service we deliver. We thank our team
of employees for delivering financial services to our customers. You meet every
challenge with a can-do spirit, giving the best of your professional abilities. Your
efforts and achievements do not go unnoticed. You make a real difference in the
lives of our customers, in the businesses we support, and in the communities we
serve.
By staying true to the values we were founded on, Peoples Bank continues to be
a well-capitalized Bank, with strong earnings and operating standards. In addition
to thanking our employees for the Bank’s many successes, we wish to extend
our gratitude to our board of directors for your extraordinary leadership and
commitment.
Here is a recap of some of our more noteworthy achievements and announcements
this year.
l The Bank is fortunate to be guided by passionate people who lead with wisdom,
kindness, integrity, and diverse business insight. It’s truly an honor to recognize
veteran banker Kimberly Boyd-Leaks on her recent appointment as the 11th
member of the Board of Directors of the Company and the Bank. Kim has served
the Bank for 27 years, most currently as Executive Vice President, Chief Retail
Banking Support Officer. She is responsible for Human Resources, Marketing,
Learning & Development, Call Center, Retail Sales Support and Customer
Relationship Management (CRM) teams.
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3
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
Report of Independent Registered Public Accounting Firm
(United States), the consolidated balance sheets of Peoples Bancorp of North Carolina, Inc. as of
December 31, 2018 and 2017, and the related consolidated statements of earnings, comprehensive
income, shareholders' equity and cash flows for each of the three years in the period ended December
To the Shareholders and the Board of Directors of Peoples Bancorp of North Carolina, Inc.
31, 2018 (not presented herein); and in our report, dated March 14, 2019, we expressed an unqualified
opinion on those consolidated financial statements.
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, 2021
In our opinion, the information set forth in the accompanying condensed consolidated financial
and 2020, and the related consolidated statements of earnings, comprehensive income, changes in
statements is fairly stated, in all material respects, in relation to the consolidated financial statements
shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021 (not
from which it has been derived.
presented herein); and in our report, dated March 18, 2022, 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
Charlotte, North Carolina
derived.
March 14, 2019
Raleigh, North Carolina
March 18, 2022
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
$
$
$
$
2 021
47,179
3,205
43,974
(1,163)
45,137
24,919
51,127
3,796
15,133
2.71
2.63
0.66
27.59
25.89
875,514
406,549
1,624,193
1,412,748
142,369
0.96%
10.24%
24.83%
9.42%
2 0 2 1 A n n u a l R e p o r t
Change
-2%
-16%
0%
-127%
13%
9%
4%
53%
33%
35%
35%
-12%
20%
4%
-7%
66%
15%
16%
2%
2020
47,958
3,836
44,122
4,259
39,863
22,914
48,931
2,489
11,357
2.01
1.95
0.75
23.02
24.84
938,731
245,249
1,416,175
1,221,086
139,899
0.83%
8.04%
38.67%
10.35%
elliottdavis.com
elliottdavis.com
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Consolidated Balance Sheets
December 31, 2021 and December 31, 2020
Consolidated Statements of Earnings
For the Years Ended December 31, 2021, 2020 and 2019
(Dollars in thousands)
Assets
Cash and due from banks, including reserve requirements
of $0 at both 12/31/21 and 12/31/20
Interest-bearing deposits
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
Interest-bearing demand, 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:
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 5,661,569 shares
at December 31, 2021 and 5,787,504 shares at December 31, 2020
Common stock, held by deferred compensation trust, at cost:
162,193 shares at December 31, 2021 and
155,469 shares at December 31, 2020
Deferred compensation
Retained earnings
Accumulated other comprehensive income
Total shareholders’ equity
Total liabilities and shareholders’ equity
December 31,
December 31,
2021
$
44,711
232,788
277,499
406,549
3,668
410,217
3,637
884,869
(9,355)
875,514
16,104
17,365
-
4,612
19,245
2 020
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
18,202
$
1,624,193
1,416,175
$
514,319
797,179
26,333
74,917
456,980
657,834
25,771
80,501
1,412,748
1,221,086
37,094
15,464
4,677
11,841
26,201
15,464
3,471
10,054
1,481,824
1,276,276
-
-
53,305
56,871
(1,992)
1,992
88,968
96
142,369
$
1,624,193
(1,796)
1,796
77,628
5,400
139,899
1,416,175
(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:
Demand deposits, MMDA & savings deposits
Time deposits
FHLB borrowings
Junior subordinated debentures
Other
Total interest expense
Net interest income
Provision for (reduction of) loan losses
Net interest income after provision for loan losses
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 sale of other assets
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
2 021
$
41,186
258
-
2,478
3,146
111
47,179
2,029
752
-
280
144
3,205
43,974
(1.163)
45,137
3,921
803
-
2,505
1,035
8,890
105
21
7,639
24,919
24,506
7,858
1,826
536
1,000
415
7,112
7,874
51,127
18,929
3,796
15,133
2.71
2.63
0.66
$
$
$
$
2 0 2 1 A n n u a l R e p o r t
2020
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
22,914
23,538
7,933
1,580
787
1,012
263
5,274
8,544
48,931
13,846
2,489
11,357
2.01
1.95
0.75
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
(239)
(11)
5,848
17,739
23,238
7,364
1,490
1,021
890
119
3,421
7,974
45,517
17,203
3,136
14,067
2.43
2.36
0.66
See accompanying Notes to Consolidated Financial Statements.
See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement, dated March 25, 2022, for a complete set of Consolidated Financial Statements
See accompanying Notes to Consolidated Financial Statements.
See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement, dated March 25, 2022, for a complete set of Consolidated Financial Statements.
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Our Leadership
Peoples Bank Subsidiaries’
Board of Directors and Officers
Shareholder and
General Information
2 0 2 1 A n n u a l R e p o r t
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.
Kim Boyd-Leaks
EVP, Chief Retail Banking
Support Officer
Peoples Bank
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 Home & 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
Lance Sellers
President & CEO
Jeffrey N. Hooper
EVP, Chief Financial Officer
Bill Cable
EVP, Chief Operating Officer
Kim Boyd-Leaks
EVP, Chief Retail Banking
Support Officer
Tim Turner
EVP, Chief Credit Officer
Jim Perry
EVP, Chief Retail Banking Officer
Retail Banking Centers, Mortgage Sales
8
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
The Annual Meeting of Shareholders of Peoples Bancorp will be
conducted in a virtual-only format at 11:00 a.m. on Thursday, May 5,
2022.
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
5410 Trinity Road, Suite 320
Raleigh, NC 27607
PeoplesBankNC.com