Peoples Bancorp of North Carolina Inc. (PEBK, Financial) filed Quarterly Report for the period ended 2009-03-31.
Peoples Bancorp of North Carolina Inc. is the holding company for Peoples Bank. Peoples Bancorp of North Carolina Inc. has a market cap of $36.28 million; its shares were traded at around $6.55 with a P/E ratio of 7.71 and P/S ratio of 0.54. The dividend yield of Peoples Bancorp of North Carolina Inc. stocks is 6.11%. Peoples Bancorp of North Carolina Inc. had an annual average earning growth of 36.6% over the past 5 years.
Interest income decreased $2.0 million or 14% for the three months ended March 31, 2009 compared with the same period in 2008. The decrease was due to a 200 basis point reduction in the Bank s prime commercial lending rate, which was partially offset by an increase in interest earning assets and income from interest rate derivative contracts. Net income from derivative instruments was $1.1 million for the three months ended March 31, 2009 when compared to a net income of $406,000 for the same period in 2008. The average yield on earning assets for the quarters ended March 31, 2009 and 2008 was 5.63% and 6.99%, respectively. During the quarter ended March 31, 2009, average loans increased $59.5 million to $780.1 million from $720.6 million for the three months ended March 31, 2008. During the quarter ended March 31, 2009, average investment securities available-for-sale increased $14.5 million to $132.8 million from $118.3 million for the three months ended March 31, 2008.
Provision for Loan Losses. For the three months ended March 31, 2009 a contribution of $1.8 million was made to the provision for loan losses compared to a $391,000 contribution to the provision for loan losses for the three months ended March 31, 2008. The increase in the provision for loan losses is primarily attributable to a $3.3 million increase in non-performing assets from March 31, 2008 to March 31, 2009, a $604,000 increase in net charge-offs during first quarter 2009 compared to first quarter 2008 and growth in the loan portfolio. Net charge-offs in first quarter 2009 included $297,000 on construction and acquisition and development loans, $82,000 on mortgage loans and $350,000 on non-real estate loans, which included $211,000 on commercial loans.
classified as other investments. Management determined the market value of this investment had decreased significantly and was not a temporary impairment therefore a write-down was appropriate during the first quarter 2009. The remaining book balance of this asset is less than $250,000. Service charges increased 7% to $1.2 million for the three months ended March 31, 2009 when compared to the same period one year ago. The increase in service charges and fees is primarily attributable to growth in the Bank s deposit base coupled with normal pricing changes. Other service charges and fees decreased 6% to $593,000 for the three-month period ended March 31, 2009 when compared to the same period one year ago. Mortgage banking income increased to $193,000 during the three months ended March 31, 2009 from $179,000 for the same period in 2008 due to an increase in mortgage originations as a result of recent increases in refinancing. Miscellaneous income was $318,000 for the three months ended March 31, 2009, a 42% decrease from $545,000 for the same period in 2008. This decrease in miscellaneous income is primarily due to a $232,000 net increase in losses and write-downs on foreclosed property in first quarter 2009 when compared to first quarter 2008.
Non-Interest Expense. Total non-interest expense increased 6% to $7.3 million for the first quarter of 2009 as compared to $6.9 million for the corresponding period in 2008. Salary and employee benefits totaled $3.6 million for the three months ended March 31, 2009, a decrease of 4% from the same period in 2008. The decrease in salary and employee benefits is due to a decrease in incentive expense. Occupancy expense increased 9% for the quarter ended March 31, 2009. The increase in occupancy expense is primarily attributable to an increase in furniture and equipment expense. Other non-interest expense increased 22% to $2.4 million for the three months ended March 31, 2009 as compared to the same period in 2008. This increase in other non-interest expense is primarily attributable to increase of $404,000 in FDIC insurance expense and an increase of $146,000 in debit card expense. The increase in FDIC insurance expense is primarily due to proposed increases in premiums announced by the FDIC in first quarter 2009.
Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by real estate, which is dependent upon the real estate market. Real estate mortgage loans include both commercial and residential mortgage loans. At March 31, 2009, the Company had $109.1 million in residential mortgage loans, $95.2 million in home equity loans and $273.3 million in commercial mortgage loans, which include $216.7 million using commercial property as collateral and $56.6 million using residential property as collateral. At March 31, 2009, real estate construction loans included $122.9 million in speculative construction and development loans.
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Peoples Bancorp of North Carolina Inc. is the holding company for Peoples Bank. Peoples Bancorp of North Carolina Inc. has a market cap of $36.28 million; its shares were traded at around $6.55 with a P/E ratio of 7.71 and P/S ratio of 0.54. The dividend yield of Peoples Bancorp of North Carolina Inc. stocks is 6.11%. Peoples Bancorp of North Carolina Inc. had an annual average earning growth of 36.6% over the past 5 years.
Highlight of Business Operations:
Summary. Net earnings for the first quarter of 2009 were $625,000, or $0.11 basic and diluted net earnings per common share before adjustment for preferred stock dividends and accretion as compared to $2.1 million, or $0.37 basic net earnings per share and $0.36 diluted net earnings per share for the same period one year ago. After adjusting for $201,000 in dividends and accretion on preferred stock, net income available to common shareholders for the three months ended March 31, 2009 was $424,000 or $0.08 basic and diluted net earnings per common share. The decrease in net earnings is attributable to a decrease an increase in provision for loan losses, a decrease in non-interest income and an increase in non-interest expense. The decline in earnings for the first quarter reflects the continuing impact of the current financial crisis that has caused declining real estate values and decreased levels of new home sales. As a result, the Company experienced a significant increase in the level of charge-offs and related increase in the provision for loan losses compared to the same quarter in 2008 as the Company aggressively recognized losses on newly non-performing loans for the three months ended March 31, 2009.Interest income decreased $2.0 million or 14% for the three months ended March 31, 2009 compared with the same period in 2008. The decrease was due to a 200 basis point reduction in the Bank s prime commercial lending rate, which was partially offset by an increase in interest earning assets and income from interest rate derivative contracts. Net income from derivative instruments was $1.1 million for the three months ended March 31, 2009 when compared to a net income of $406,000 for the same period in 2008. The average yield on earning assets for the quarters ended March 31, 2009 and 2008 was 5.63% and 6.99%, respectively. During the quarter ended March 31, 2009, average loans increased $59.5 million to $780.1 million from $720.6 million for the three months ended March 31, 2008. During the quarter ended March 31, 2009, average investment securities available-for-sale increased $14.5 million to $132.8 million from $118.3 million for the three months ended March 31, 2008.
Provision for Loan Losses. For the three months ended March 31, 2009 a contribution of $1.8 million was made to the provision for loan losses compared to a $391,000 contribution to the provision for loan losses for the three months ended March 31, 2008. The increase in the provision for loan losses is primarily attributable to a $3.3 million increase in non-performing assets from March 31, 2008 to March 31, 2009, a $604,000 increase in net charge-offs during first quarter 2009 compared to first quarter 2008 and growth in the loan portfolio. Net charge-offs in first quarter 2009 included $297,000 on construction and acquisition and development loans, $82,000 on mortgage loans and $350,000 on non-real estate loans, which included $211,000 on commercial loans.
classified as other investments. Management determined the market value of this investment had decreased significantly and was not a temporary impairment therefore a write-down was appropriate during the first quarter 2009. The remaining book balance of this asset is less than $250,000. Service charges increased 7% to $1.2 million for the three months ended March 31, 2009 when compared to the same period one year ago. The increase in service charges and fees is primarily attributable to growth in the Bank s deposit base coupled with normal pricing changes. Other service charges and fees decreased 6% to $593,000 for the three-month period ended March 31, 2009 when compared to the same period one year ago. Mortgage banking income increased to $193,000 during the three months ended March 31, 2009 from $179,000 for the same period in 2008 due to an increase in mortgage originations as a result of recent increases in refinancing. Miscellaneous income was $318,000 for the three months ended March 31, 2009, a 42% decrease from $545,000 for the same period in 2008. This decrease in miscellaneous income is primarily due to a $232,000 net increase in losses and write-downs on foreclosed property in first quarter 2009 when compared to first quarter 2008.
Non-Interest Expense. Total non-interest expense increased 6% to $7.3 million for the first quarter of 2009 as compared to $6.9 million for the corresponding period in 2008. Salary and employee benefits totaled $3.6 million for the three months ended March 31, 2009, a decrease of 4% from the same period in 2008. The decrease in salary and employee benefits is due to a decrease in incentive expense. Occupancy expense increased 9% for the quarter ended March 31, 2009. The increase in occupancy expense is primarily attributable to an increase in furniture and equipment expense. Other non-interest expense increased 22% to $2.4 million for the three months ended March 31, 2009 as compared to the same period in 2008. This increase in other non-interest expense is primarily attributable to increase of $404,000 in FDIC insurance expense and an increase of $146,000 in debit card expense. The increase in FDIC insurance expense is primarily due to proposed increases in premiums announced by the FDIC in first quarter 2009.
Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by real estate, which is dependent upon the real estate market. Real estate mortgage loans include both commercial and residential mortgage loans. At March 31, 2009, the Company had $109.1 million in residential mortgage loans, $95.2 million in home equity loans and $273.3 million in commercial mortgage loans, which include $216.7 million using commercial property as collateral and $56.6 million using residential property as collateral. At March 31, 2009, real estate construction loans included $122.9 million in speculative construction and development loans.
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