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2024 ReportPeers and competitors of Peoples Bancorp of North Carolina, Inc.:
First United Corporation2 0 2 4 A n n u a l R e p o r t 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. 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. Progressive and Positive We see change as an opportunity. Table of Contents Message from the President 2 Reports of Independent Registered Public Accounting Firms 4 Consolidated Balance Sheets 6 Consolidated Statements of Earnings 7 Our Leadership 8 2 0 2 4 A n n u a l R e p o r t In 2024, the Bank marked its 112th consecutive year of channeling our resources, expertise, passion, and commitment to serve our customers, communities, and each other. It has been a year of great change, as well as a year of staying true to who we are. One significant change is my appointment to the role of President and CEO. While change in leadership is always significant, I have worked closely with our board and my predecessor, Lance Sellers, for many years as Chief Operating Officer, and I plan to continue to build upon our proud legacy. It is a great honor to serve as the 11th President and CEO of Peoples Bank, to lead us into the future as a strong, independent community bank that is exceptional at serving our communities. Thank you to our talented and dedicated team of senior executives who have helped to create a seamless transition in leadership. To all the employees of Peoples Bank, you play a vital role in helping our communities grow and prosper, in helping people live better lives. Thank you for being exceptional at what you do. You are Peoples Bank and it is a privilege to serve you. 2024 highlights for Peoples Bancorp of North Carolina, Inc. are as follows: l 2024 marked a record earning year with net earnings of $16.4 million or $3.08 per share and $2.98 per diluted share for the year ended December 31, 2024, compared to $15.5 million or $2.87 per share and $2.77 per diluted share for the year ended December 31, 2023. l Total loans were $1.14 billion at December 31, 2024, compared to $1.09 billion at December 31, 2023. l Total deposits were $1.48 billion at December 31, 2024, compared to $1.39 billion at December 31, 2023. Deposit balances covered by FDIC insurance amounted to 73.29% of total deposits at December 31, 2024 and 72.55% of total deposits at December 31, 2023. Peoples Bank continues to be well-capitalized with robust earnings and operating standards. As we commend our employees for their many and varied contributions to the success of the Bank, we also wish to express our appreciation and gratitude to our board of directors for their unique perspectives, invaluable insights, and extraordinary guidance, leadership, and support. Here is a recap of some of our more noteworthy achievements and announcements during this past year. Sound & Secure Banking In early 2024, amidst industry-wide concerns of bank failures, we demonstrated exceptional leadership, soundness and financial security. Our steadfast dedication to our core values helped instill confidence among our customers, solidifying our role as a stable, trusted, and reliable financial partner during turbulent times. Community Involvement and Growth This past year, our community involvement reached new heights with approximately 1,600 total volunteer hours, including 318 CRA-eligible hours, marking a 13% overall increase. Volunteer time and giving was focused primarily on non-profits and education—areas that align perfectly with our strategic priorities of supporting our communities. These From the President “It is a great honor for me to serve you as the 11th President and CEO of Peoples Bank.” 2 achievements, coupled with a 15% rise in CRA volunteer contributions, showcase our dedication to fostering meaningful change in the communities we serve. Expanding Expertise on Our Board of Directors Peoples Bank proudly welcomed three distinguished professionals—Ashton Abernethy, Robert C. Abernethy Jr., and Dan R. Timmerman Jr.—to its Board of Directors. Each new member brings extensive expertise in leadership, strategic planning, and community engagement, reinforcing the Bank’s dedication to serving customers and fostering growth. Peoples Bank Makes Two Key Promotions Carol Shinn was promoted to Executive Vice President, Chief Operations Officer. Carol will be responsible for overseeing the Bank’s technology strategy and implementation, deposit operations, digital banking, project management, and more. Jody Street was promoted to Executive Vice President, Chief Commercial Banking Officer. Jody will be responsible for leading the commercial banking team with a focus of expanding our markets and services across our footprint. In addition to the Bank, which operates as a wholly-owned subsidiary of Peoples Bancorp of North Carolina, Inc. (the “Company”) we would like to remind you of our three subsidiary companies: Peoples Investment Services, Inc. provides 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. provides residential and commercial real estate appraisals to the Peoples Bank market area and is 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. Despite a challenging rate environment in 2024, CBRES achieved a record year in growth and earnings. Thank you for your support and for recommending our Bank and subsidiary companies to members of your communities. Sincerely, Bill Cable President and Chief Executive Officer 3 2 0 2 4 A n n u a l R e p o r t Lance Sellers Retires as President and CEO Peoples Bank is deeply committed to its core values, one of which is conducting business with integrity and doing what is right. Lance Sellers exemplified this commitment throughout his distinguished 40-year career in the banking industry, including 26 years of dedicated service at Peoples Bank. Over the past 12 years, he has served as President and CEO, guiding the Bank with exceptional leadership. Under Lance’s tenure, Peoples Bank achieved significant growth and success. The Bank’s assets expanded from $1 billion to $1.6 billion, and it experienced five years of record earnings, reflecting remarkable progress and financial stability. His leadership has strengthened the Bank and positioned it for continued success in the future. We extend our sincere gratitude to Lance for his exemplary service and lasting contributions. We celebrate his many achievements and wish him every success and fulfillment in his retirement. 4 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 sheet of Peoples Bancorp of North Carolina, Inc. as of December 31, 2024, and the related consolidated statements of earnings, comprehensive income (loss), changes in shareholders’ equity and cash flows for the year ended December 31, 2024 (not presented herein); and in our report dated March 12, 2025, 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, NC March 12, 2025 5 2 0 2 4 A n n u a l R e p o r t 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 sheet of Peoples Bancorp of North Carolina, Inc. as of December 31, 2023, and the related consolidated statements of earnings, comprehensive income (loss), changes in shareholders’ equity and cash flows for each of the years in the periods ended December 31, 2023 and 2022 (not presented herein); and in our report, dated March 7, 2024, 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. Raleigh, North Carolina March 7, 2024 elliottdavis.com Consolidated Balance Sheets December 31, 2024 and December 31, 2023 (Dollars in thousands) December 31, December 31, Assets 2024 2023 Cash and due from banks $ 30,919 32,819 Interest-bearing deposits 28,347 49,556 Cash and cash equivalents 59,266 82,375 Investment securities available for sale 388,003 391,924 Other investments 2,728 2,874 Total securities 390,731 394,798 Mortgage loans held for sale 1,367 686 Loans 1,138,404 1,093,066 Less allowance for credit losses (9,995) (11,041) Net loans 1,128,409 1,082,025 Premises and equipment, net 14,847 16,702 Cash surrender value of life insurance 17,675 18,134 Other real estate 369 - Right of use lease asset 4,013 4,731 Accrued interest receivable and other assets 35,285 36,459 Total assets $ 1,651,962 1,635,910 Liabilities and Shareholders’ Equity Deposits: Noninterest-bearing demand $ 402,254 432,687 Interest-bearing demand, MMDA & savings 741,363 620,244 Time, over $250,000 145,939 148,904 Other time 195,175 190,210 Total deposits 1,484,731 1,392,045 Securities sold under agreements to repurchase - 86,715 Junior subordinated debentures 15,464 15,464 Lease liability 4,136 4,832 Accrued interest payable and other liabilities 17,068 15,838 Total liabilities 1,521,399 1,514,894 Commitments and Contingencies 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 5,457,646 shares at December 31, 2024 and 5,534,499 shares at December 31, 2023 48,658 50,625 Common stock held by deferred compensation trust, at cost; 158,580 shares at December 31, 2024 and 163,702 shares at December 31, 2023 (1,757) (1,910) Deferred compensation 1,757 1,910 Retained earnings 121,062 109,756 Accumulated other comprehensive loss (39,157) (39,365) Total shareholders’ equity 130,563 121,016 Total liabilities and shareholders’ equity $ 1,651,962 1,635,910 Derived from audited financial statements. See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement for a complete set of audited financial statements. 6 2 0 2 3 A n n u a l R e p o r t (Audited) (Audited) (Audited) Consolidated Statements of Earnings For the Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands, except per share amounts) 2024 2023 2022 Interest income: Interest and fees on loans $ 62,920 55,507 43,077 Interest on due from banks 2,796 2,216 2,223 Interest on investment securities: U.S. Government sponsored enterprises 9,979 9,365 4,150 States and political subdivisions 2,779 2,949 4,075 Other 2,259 1,825 906 Total interest income 80,733 71,862 54,431 Interest expense: Demand deposits, MMDA & savings deposits 10,237 6,731 2,019 Time deposits 14,316 7,916 562 Junior subordinated debentures 1,116 1,079 529 Other 985 1,417 213 Total interest expense 26,654 17,143 3,323 Net interest income 54,079 54,719 51,108 Provision for (recovery of) credit losses (285) 1,566 1,472 Net interest income after provision for credit losses 54,364 53,153 49,636 Non-interest income: Service charges 5,653 5,496 5,290 Other service charges and fees 685 697 734 Gain (loss) on sale of securities, net 5 (2,488) - Mortgage banking income 357 301 393 Insurance and brokerage commissions 989 929 945 Appraisal management fee income 11,691 9,592 11,663 Gain (loss) on sale of premises and equipment - 184 (85) Miscellaneous 8,335 8,203 7,749 Total non-interest income 27,715 22,914 26,689 Non-interest expense: Salaries and employee benefits 28,209 26,640 26,130 Occupancy 8,686 7,962 8,048 Professional fees 2,316 1,716 1,915 Advertising 791 750 693 Debit card expense 1,391 1,255 1,224 FDIC insurance 764 745 461 Appraisal management fee expense 9,263 7,559 9,264 Other 9,730 9,517 8,295 Total non-interest expense 61,150 56,144 56,030 Earnings before income taxes 20,929 19,923 20,295 Income tax expense 4,576 4,377 4,172 Net earnings $ 16,353 15,546 16,123 Basic net earnings per share $ 3.08 2.87 2.94 Diluted net earnings per share $ 2.98 2.77 2.85 Cash dividends declared per share $ 0.92 0.91 0.87 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. (Audited) (Audited) (Audited) 7 2 0 2 4 A n n u a l R e p o r t Consolidated Statements of Earnings For the Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands, except per share amounts) 2024 2023 2022 Interest income: Interest and fees on loans $ 62,920 55,507 43,077 Interest on due from banks 2,796 2,216 2,223 Interest on investment securities: U.S. Government sponsored enterprises 9,979 9,365 4,150 States and political subdivisions 2,779 2,949 4,075 Other 2,259 1,825 906 Total interest income 80,733 71,862 54,431 Interest expense: Now, MMDA & savings deposits 10,237 6,731 2,019 Time deposits 14,316 7,916 562 Junior subordinated debentures 1,116 1,079 529 Other 985 1,417 213 Total interest expense 26,654 17,143 3,323 Net interest income 54,079 54,719 51,108 Provision for (recovery of) credit losses (285) 1,566 1,472 Net interest income after provision for credit losses 54,364 53,153 49,636 Non-interest income: Service charges 5,653 5,496 5,290 Other service charges and fees 685 697 734 Gain (loss) on sale of securities, net 5 (2,488) - Mortgage banking income 357 301 393 Insurance and brokerage commissions 989 929 945 Appraisal management fee income 11,691 9,592 11,663 Gain (loss) on sale of premises and equipment - 184 (85) Miscellaneous 8,335 8,203 7,749 Total non-interest income 27,715 22,914 26,689 Non-interest expense: Salaries and employee benefits 28,209 26,640 26,130 Occupancy 8,686 7,962 8,048 Professional fees 2,316 1,716 1,915 Advertising 791 750 693 Debit card expense 1,391 1,255 1,224 FDIC insurance 764 745 461 Appraisal management fee expense 9,263 7,559 9,264 Other 9,730 9,517 8,295 Total non-interest expense 61,150 56,144 56,030 Earnings before income taxes 20,929 19,923 20,295 Income tax expense 4,576 4,377 4,172 Net earnings $ 16,353 15,546 16,123 Basic net earnings per share $ 3.08 2.87 2.94 Diluted net earnings per share $ 2.98 2.77 2.85 Cash dividends declared per share $ 0.92 0.91 0.87 Derived from audited financial statements. See Appendix A to the Peoples Bancorp of North Carolina, Inc. Proxy Statement for a complete set of audited financial statements. Peoples Bank and Peoples Bancorp Board of Directors Robert C. Abernethy Sr. Chairman of the Board Peoples Bancorp of North Carolina, Inc. and Peoples Bank President, Secretary and Treasurer Carolina Glove & Safety Company Inc. James S. Abernethy Vice Chairman of the Board Peoples Bancorp of North Carolina, Inc. and Peoples Bank President and Assistant Secretary Midstate Contractors, Inc. Douglas S. Howard Vice President and Treasurer Denver Equipment Company of Charlotte, Inc John W. Lineberger Jr. Vice President Lineberger Brothers, Inc. 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, Collegiate 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 Dan R. Timmerman Jr. President & Co-Owner Timmerman Manufacturing Inc Ashton Abernethy Vice President of Sales & Behavioral Health Medusind Behavioral Health Robert C. Abernethy Jr. Executive Vice President & Board Member Carolina Glove & Safety Company Inc. Our Leadership 8 Bill Cable President & CEO Jeffrey Hooper EVP, Chief Financial Officer Jim Perry EVP, Chief Banking Officer Tim Turner EVP, Chief Credit Officer Carol Shinn EVP, Chief Operations Officer Jody Street EVP, Chief Commercial Banking Officer Community Bank Real Estate Solutions, LLC Board of Directors Robert C. Abernethy Sr. David E. Reitzel Dan Ray Timmerman, Sr. William D. Cable Sr. Peoples Investment Services, Inc. Board of Directors Robert C. Abernethy Sr. Billy L. Price Jr., M.D. David C. Brown Larry E. Robinson Douglas S. Howard William D. Cable Sr. Real Estate Advisory Services, Inc. Board of Directors Robert C. Abernethy Sr. Dan Ray Timmerman Sr. David E. Reitzel William D. Cable Sr. Officers David E. Reitzel President William D. Cable Sr. Vice President John Noonan Vice President Krissy O. Price Secretary Jeffrey N. Hooper Treasurer Officers David C. Brown President William D. Cable Sr. Vice President and Assistant Secretary Krissy O. Price Secretary Jeffrey N. Hooper Treasurer Officers David E. Reitzel President William D. Cable Sr. 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 1, 2025 . 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 Auditor Forvis Mazars , LLP 4350 Congress Street, Suite 900, Charlotte, NC 28209 Peoples Bank Subsidiaries’ Board of Directors and Officers Shareholder and General Information 2 0 2 4 A n n u a l R e p o r t In 2024, Peoples Bank lost an exceptional servant leader. Kim Boyd Leaks was a friend, mentor, role model, believer, encourager, and inspiration to all who knew her. During her 30-year tenure with Peoples Bank, she served as Executive Vice President, Chief Banking Support Officer, and as a Director. Prior to Kim’s passing, she had retired from Peoples Bank in 2024 after 40 laudable years in the banking field. Kim was responsible for many significant achievements of the Bank, including helping us define, communicate, and live out our vision and mission of wanting to be exceptional at serving others. Throughout her life—with every pursuit, and in every relationship she forged—Kim exemplified our credo to Be Exceptional. Kim Boyd-Leaks Exemplified “Be Exceptional”
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