On April 22, 2024, Peoples Bancorp of North Carolina Inc (PEBK, Financial) disclosed its first quarter results for the year, showcasing an increase in net earnings and a significant rise in total deposits. The detailed financial performance can be explored through the company's 8-K filing.
Company Overview
Peoples Bancorp of North Carolina Inc operates as a state-chartered commercial bank, primarily serving various regions across North Carolina including Lincolnton, Newton, and Charlotte, among others. The bank focuses on a diversified loan portfolio with minimal exposure to foreign and agricultural loans, deriving its main income from dividends paid by its banking subsidiary.
Financial Performance Summary
For Q1 2024, Peoples Bancorp reported net earnings of $3.9 million, or $0.74 per share, up from $3.2 million, or $0.58 per share in the same period last year. This improvement was primarily attributed to an increase in non-interest income and a decrease in the provision for credit losses, despite a drop in net interest income and a rise in non-interest expenses. Total loans remained stable at $1.1 billion, while total deposits increased from $1.4 billion at the end of 2023 to $1.5 billion as of March 31, 2024.
Detailed Financial Metrics
The bank's net interest margin decreased to 3.33% in the first quarter from 3.77% a year earlier. Non-interest income saw a significant rise to $6.0 million, up from $3.6 million in the prior year's first quarter, benefiting from the absence of losses on sales of securities that were present in the previous year. Meanwhile, non-interest expenses climbed to $14.5 million, driven by increases in salaries and appraisal management fee expenses.
Peoples Bancorp's asset quality remains robust with non-performing assets making up only 0.24% of total assets, consistent with the end of 2023. The allowance for credit losses on loans was slightly reduced to $10.9 million or 0.98% of total loans, reflecting a cautiously optimistic outlook on asset quality.
Strategic Developments and Outlook
Management highlighted the strategic importance of core deposits, which rose to $1.3 billion and represent a low-cost funding source enhancing the bank's profitability. The shift in customer preferences from securities sold under agreements to repurchase to deposits through the IntraFi network’s Insured Cash Sweep (ICS) was noted as a key development during the quarter.
President and CEO Lance A. Sellers emphasized the positive impact of these shifts on the bank’s financial health and its ability to serve the community effectively. Looking forward, the bank remains focused on sustaining its growth trajectory while managing costs and enhancing its non-interest income streams.
Conclusion
The first quarter of 2024 has set a positive tone for Peoples Bancorp as it navigates a challenging interest rate environment and evolves its strategy to bolster its financial position. The bank's ability to grow core deposits and manage non-interest income highlights its resilience and adaptability in a dynamic banking landscape.
Investors and stakeholders will likely watch closely how Peoples Bancorp continues to balance growth, expenses, and asset quality in the upcoming quarters.
Explore the complete 8-K earnings release (here) from Peoples Bancorp of North Carolina Inc for further details.
