2 0 2 2 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.
employees, customers
Accountability
and shareholders.
We are accountable for our own
actions and bank goals.
Progressive and Positive
We see change as an opportunity.
Our Mission
To provide exceptional
customer service while
selling to customer needs.
Table of Contents
Message from the President
Financial Highlights
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Earnings
Our Leadership
2
4
5
6
7
8
From the President
2 0 2 2 A n n u a l R e p o r t
2022 was the Bank’s 110th consecutive year of business, continuing to build
relationships, achieve goals, and contribute to making communities stronger.
Once again, this year’s annual report will reflect the continued dedication of our
employees who go the extra mile to serve, inform, and support our customers and
are always willing to give back to the communities where we live and work. Thank
you for all you do to help others reach their potential.
At Peoples Bank, we don’t just offer financial services solutions, we also educate. We want our customers to make smart
decisions when it comes to saving, spending, and managing their finances. It’s important that our customers know we
have the resources and knowledge to guide them to stronger financial wellness. Having made financial education a key
focus, we launched our Financial Wellness Learning Center, which provides online financial education. Also, we provide
resources to our community’s teachers to use in the classroom.
In addition to the Bank, which operates as a wholly-owned subsidiary of the Company, we would like to remind you of
Year-to-date highlights are as follows:
our three subsidiary companies:
l Net earnings were $16.1 million or $2.94 per share and $2.85 per diluted share for
the year ended December 31, 2022, as compared to $15.1 million or $2.71 per share
and $2.63 per diluted share for the year ended December 31, 2021.
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.
l Total loans increased $147.7 million to $1.0 billion at December 31, 2022, compared
Real Estate Advisory Services, Inc., which provides real estate appraisals (both residential and commercial) to the
to $884.9 million at December 31, 2021.
Peoples Bank market area, thereby becoming a valued partner with respect to real estate lending.
l Core deposits were $1.4 billion or 97.84% of total deposits at December 31, 2022,
compared to $1.4 billion or 98.14% of total deposits at December 31, 2021.
Peoples Bank continues to be a well-capitalized Bank with strong earnings and
operating standards. In addition to extending our gratitude to our employees for
our many successes, we must also recognize our board of directors who lead with
extraordinary insights and vision. Thank you for your guidance and strength, and for
helping us make a difference.
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.
Sincerely,
Here is a recap of some of our more noteworthy achievements and announcements
Lance A. Sellers
this year.
President and Chief Executive Officer
Many people rely on Peoples Bank. It’s important to be where we are needed
most, and to be easily accessible for our customers. To that end, we relocated our
Cornelius office to Huntersville, North Carolina. The new full-service branch opened
for business on May 3, 2022, at 9617 Holly Point Drive. This location allows us to
extend service to more people and local businesses. Also, it provides a drive-thru
service and an easily accessible ATM for customers.
Our customers—both consumer and business—rely on lending solutions to get
ahead in life and in business. Loans have the power to turn challenges into
opportunities, and are often necessary to start a business, buy a home, achieve a
goal, or pursue a passion. It’s a privilege to announce that our loan performance
has been exceptional this year, particularly in our newer markets. Through our
competitive loans and superior service, Peoples Bank has played a significant role
in helping our communities flourish.
“ Being there for
our customers
and communities
with financial
services
solutions and
education has
produced another
successful year.”
2
3
Financial Highlights
Dollars in Thousands Except Per Share Amounts
Interest income
Interest expense
Net interest earnings
Provision for (recovery of) 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
$
$
$
2022
54,431
3,323
51,108
1,472
49,636
26,689
56,030
4,172
16,123
2.94
2.85
0.87
32.56
19.24
$
1,022,114
445,394
1,620,927
1,435,215
105,195
0.97%
13.01%
30.61%
7.45%
2021
Change
Report of Independent Registered Public Accounting Firm
2 0 2 2 A n n u a l R e p o r t
15%
4%
16%
-227%
10%
7%
10%
10%
7%
8%
8%
32%
18%
-26%
17%
10%
0%
2%
-26%
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%
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, 2022
In our opinion, the information set forth in the accompanying condensed consolidated financial
and 2021, and the related consolidated statements of earnings, comprehensive income (loss), 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, 2022 (not
from which it has been derived.
presented herein); and in our report, dated March 17, 2023, 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 17, 2023
elliottdavis.com
4
5
elliottdavis.com
Consolidated Balance Sheets
December 31, 2022 and December 31, 2021
Consolidated Statements of Earnings
For the Years Ended December 31, 2022, 2021 and 2020
(Dollars in thousands)
Assets
Cash and due from banks, including reserve requirements
of $0 at both 12/31/22 and 12/31/21
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
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 5,636,830 shares
at December 31, 2022 and 5,661,569 shares at December 31, 2021
Common stock, held by deferred compensation trust, at cost:
169,004 shares at December 31, 2022 and
162,193 shares at December 31, 2021
Deferred compensation
Retained earnings
Accumulated other comprehensive income (loss)
Total shareholders’ equity
Total liabilities and shareholders’ equity
December 31,
December 31,
2022
(Audited)
$
50,061
21,535
71,596
445,394
2,656
448,050
211
1,032,608
(10,494)
1,022,114
18,205
17,703
5,116
37,932
2 021
(Audited)
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
$
1,620,927
1,624,193
$
523,088
814,128
31,001
66,998
1,435,215
47,688
15,464
5,185
12,180
514,319
797,179
26,333
74,917
1,412,748
37,094
15,464
4,677
11,841
1,515,732
1,481,824
-
-
52,636
53,305
(2,181)
2,181
100,156
(47,597)
105,195
$
1,620,927
(1,992)
1,992
88,968
96
142,369
1,624,193
See accompanying Notes to Consolidated Financial Statements.
See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement for a complete set of Consolidated Financial Statements.
(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 (recovery 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 premises and equipment
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
$
$
$
$
$
2 022
43,077
2,223
-
4,962
4,075
94
54,431
2,019
562
-
529
213
3,323
51,108
1,472
49,636
5,290
734
-
393
945
11,663
(85)
-
7,749
26,689
26,130
8,048
1,915
693
1,224
461
9,264
8,295
56,030
20,295
4,172
16,123
2.94
2.85
0.87
2 0 2 2 A n n u a l R e p o r t
2021
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
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
6
7
See accompanying Notes to Consolidated Financial Statements.
See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement for a complete set of Consolidated Financial Statements.
Our Leadership
Peoples Bank Subsidiaries’
Board of Directors and Officers
Shareholder and
General Information
2 0 2 2 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
Clemson Legacy Designs
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
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 4,
2023.
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