PEBK.NASDAQPeoples Bancorp of North Carolina INC

DEF: Peoples Bancorp Reports Strong 2025 Earnings, Outlines 2026 Proxy

Sentiment:

Proxy Statement and Annual Report 25 March 2026 10:16 AM

📋All filings for Peoples Bancorp of North Carolina INC

Peoples Bancorp of North Carolina, Inc. announced a significant increase in net earnings for 2025 and detailed proposals for its upcoming virtual 2026 Annual Meeting of Shareholders.

Better than expectedNet earnings increased significantly from $16.4 million in 2024 to $19.8 million in 2025.Key profitability ratios, Return on Average Total Assets and Return on Average Shareholders' Equity, both improved year-over-year.Net interest income and non-interest income both saw increases.Asset quality improved with a decrease in net charge-offs and non-performing assets.

Summary

Net earnings increased to $19.8 million ($3.74 basic EPS) in 2025 from $16.4 million ($3.08 basic EPS) in 2024.
Total assets grew to $1.70 billion in 2025 from $1.65 billion in 2024, with net loans rising to $1.19 billion from $1.13 billion.
Shareholders' equity increased to $157.1 million in 2025 from $130.6 million in 2024.
Return on average total assets improved to 1.17% in 2025 from 0.99% in 2024, and return on average shareholders' equity rose to 13.33% from 12.59%.
The 2026 Annual Meeting will be held virtually on May 7, 2026, to elect 10 directors, approve executive compensation on an advisory basis, and ratify Forvis Mazars, LLP as the independent auditor.
Executive compensation for 2025 included discretionary bonuses of $165,000 for CEO William D. Cable, Sr., $90,000 for CFO Jeffrey N. Hooper, and $55,250 for CCO Jody G. Street.
The company maintains a "well capitalized" status under Basel III capital standards, with strong capital ratios.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, with significant increases in net earnings and key profitability ratios, coupled with improved asset quality. The robust capital position further enhances the positive outlook, despite some increases in operating expenses and a shift in credit loss provision.

Positives

Net earnings increased by 21.2% to $19.8 million in 2025 from $16.4 million in 2024.
Basic net earnings per share rose to $3.74 in 2025 from $3.08 in 2024.
Return on average total assets improved to 1.17% in 2025 from 0.99% in 2024.
Return on average shareholders' equity increased to 13.33% in 2025 from 12.59% in 2024.
Net interest income grew to $59.0 million in 2025 from $54.1 million in 2024, driven by increased loan interest income.
Non-interest income increased to $31.0 million in 2025 from $27.7 million in 2024, partly due to a $3.0 million net gain on the North Carolina Department of Transportation eminent domain acquisition and a $2.0 million increase in appraisal management fee income.
Net charge-offs decreased to $505,000 in 2025 from $1.4 million in 2024, indicating improved loan quality.
Non-performing assets decreased to $4.2 million (0.25% of total assets) in 2025 from $4.8 million (0.29% of total assets) in 2024.
Shareholders' equity increased by $26.5 million to $157.1 million in 2025, partly due to net income and a decrease in the unrealized loss on investment securities available for sale.
The Bank maintained its "well capitalized" status, exceeding all Basel III minimum capital ratios.

Negatives

Provision for credit losses was an expense of $938,000 in 2025, compared to a recovery of $285,000 in 2024, indicating a higher allocation for potential loan losses.
Non-interest expense increased to $63.2 million in 2025 from $61.2 million in 2024, primarily due to higher appraisal management fee expense, professional fees, debit card expense, occupancy, and advertising.
The effective tax rate increased to 23.29% in 2025 from 21.86% in 2024.
The liquidity ratio for the Bank decreased slightly to 26.86% in 2025 from 28.16% in 2024.
The Company's stock repurchase programs authorized in June 2024 ($2.0 million) and March 2025 ($3.0 million) both expired without any shares being repurchased.

Risks

Competition in the markets served by Peoples Bank.
Changes in the interest rate environment.
General national, regional, or local economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and the possible impairment of collectibility of loans.
Legislative or regulatory changes, including changes in accounting standards.
Significant changes in the federal and state legal and regulatory environment and tax laws.
The impact of changes in monetary and fiscal policies, laws, rules and regulations.
The allowance for credit losses process includes subjective elements and is susceptible to significant change, potentially requiring future additions that could adversely affect earnings or financial position.
A substantial portion of the loan portfolio is collateralized by real estate, making it dependent upon the real estate market.
Should economic conditions deteriorate, the inability of distressed customers to service their existing debt could cause higher levels of non-performing loans.

Future Outlook

Management expects continued moderate economic growth in its market area, despite national and international market uncertainties. The Company does not have specific plans to open additional offices in 2026 but will continue to seek growth opportunities in nearby markets. The Company undertakes no obligation to update any forward-looking statements.

Management Comments

We believe that having a non-employee Chairman and separating the role of Chairman from that of President/Chief Executive Officer is one more method to create appropriate checks and balances in corporate governance as we seek to operate the Company in an effective and efficient manner for the benefit of our shareholders and other constituencies.
We believe our current structure results in strong, independent leadership of our Board.
We believe that we can be more effective in serving our customers than many of our non-local competitors because of our ability to quickly and effectively provide senior management responses to customer needs and inquiries.
Our ability to provide these services is enhanced by the stability and experience of our Bank officers and managers.

Industry Context

StockSavvy.ai notes that Peoples Bancorp's focus on local market growth and community-oriented banking aligns with a trend among regional banks to leverage deep community ties for stable deposit bases and targeted lending. The increase in net interest income despite a decreasing federal funds rate environment towards the end of 2025 suggests effective asset/liability management, a critical factor for regional banks navigating interest rate volatility. The growth in appraisal management fee income through its CBRES subsidiary indicates successful diversification into fee-based services, a common strategy to bolster non-interest income in a competitive banking landscape.

Comparison to Industry Standards

The filing does not provide specific comparable companies or projects for direct benchmarking. However, StockSavvy.ai observes that the Bank's return on average assets of 1.17% and return on average shareholders' equity of 13.33% for 2025 are generally competitive within the community banking sector, often exceeding the average for smaller regional banks which typically range from 0.8% to 1.2% for ROAA and 10% to 15% for ROAE.
The maintenance of 'well capitalized' status under Basel III, with a Common Equity Tier 1 ratio of 14.83% for the Bank, significantly surpasses the 6.5% regulatory minimum, indicating a robust capital position compared to global benchmarks.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President and Chief Executive Officer	Lance A. Sellers	William D. Cable, Sr.	September 2024	Promotion of Mr. Cable from Executive Vice President and Chief Operating Officer.
Executive Vice President and Chief Commercial Banking Officer	NA	Jody G. Street	2025	Promotion to Executive Vice President and Chief Commercial Banking Officer, expanding oversight across all markets.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Leadership Structure	Maintains a non-employee Chairman (Robert Abernethy Sr.) separate from the President/CEO role to create appropriate checks and balances.	Ongoing	Enhances independent oversight and corporate governance.
Risk Oversight	The Board administers risk oversight through its committee structure, with the Audit and Enterprise Risk Committee having primary oversight responsibility for risk management.	Ongoing	Ensures comprehensive monitoring and management of various risks, including credit, interest rate, liquidity, compliance, operational, and reputational risks.
Policy Adoption	Adopted the Excess Incentive-Based Compensation Recovery Policy (Clawback Policy) in compliance with SEC and NASDAQ rules.	October 2023	Mandates recovery of erroneously awarded incentive-based compensation from executive officers in the event of an accounting restatement, strengthening accountability.
Policy Amendment	Employment agreements for named executive officers were amended to comply with the Clawback Policy.	November 2023	Ensures contractual alignment with the new Clawback Policy for key executives.
Policy Adoption	Maintains a Code of Business Conduct and Ethics, Insider Trading Policies, Award of Stock Rights Policy, and a written diversity policy.	Ongoing	Promotes ethical conduct, compliance with securities laws, fair compensation practices, and diversity within the organization.

Related Party Transactions

The Bank provides loans and other credit facilities to directors, executive officers, employees, and businesses in which they have direct or indirect interests, in the ordinary course of business and on terms consistent with those offered to the general public, in accordance with Federal Reserve Regulation O.
Outstanding loans to related parties totaled $3.235 million at December 31, 2025, a decrease from $4.871 million at December 31, 2024.
Deposit relationships with related parties totaled $44.9 million at December 31, 2025, a decrease from $65.5 million at December 31, 2024.
All material transactions with related persons (other than those subject to Regulation O) are reviewed and approved by a majority vote of disinterested directors to ensure fairness to the Company and the Bank.

Stakeholder Impact

Shareholders: Positive impact from increased net earnings, EPS, and book value per share. Opportunity to vote on key governance matters at the Annual Meeting.
Employees: Benefit from the 401(k) plan with a 4% company match and the Service Recognition Program. Executive officers also benefit from supplemental retirement agreements and potential change-in-control payments.
Customers: Continued focus on community-oriented financial services and meeting credit needs in local markets.
Regulatory Authorities: The Company and Bank maintain "well capitalized" status, demonstrating compliance with regulatory capital requirements.

Next Steps

Shareholders are encouraged to vote on director elections, executive compensation, and auditor ratification at the 2026 Annual Meeting on May 7, 2026.
The Compensation Committee will take into account the outcome of the Say-on-Pay vote when considering future executive compensation arrangements.
The Company will continue to look for and consider growth opportunities in nearby markets.

Key Dates

Date	Description
1912	Peoples Bank commenced business upon receipt of its banking charter.
1976	Robert C. Abernethy, Sr. began serving as a director of the Company.
1991	Robert C. Abernethy, Sr. began serving as Chairman of the Board.
1992	James S. Abernethy began serving as a director of the Company.
1995	William D. Cable, Sr. joined the Company and the Bank.
1995	Benjamin I. Zachary began serving as a director of the Company.
1996	Peoples Investment Services, Inc. (PIS) began operations.
1997	Real Estate Advisory Services, Inc. (REAS) began operations.
1999	Peoples Bancorp of North Carolina, Inc. was formed as the holding company for Peoples Bank.
1999	James O. Perry joined the Bank.
2001	Gary E. Matthews began serving as a director of the Company.
2004	Douglas S. Howard began serving as a director of the Company.
2004	John W. Lineberger, Jr. began serving as a director of the Company.
2004	Billy L. Price, Jr., M.D. began serving as a director of the Company.
2004	William Gregory Terry began serving as a director of the Company.
2006-06	The Company formed PEBK Capital Trust II to issue $20.6 million of trust preferred securities.
2006-12	Proceeds from PEBK Capital Trust II used to repay trust preferred securities issued in December 2001.
2008-12-18	Amended and Restated Executive Salary Continuation Agreement with Mr. Cable became effective.
2009	Community Bank Real Estate Solutions, LLC (CBRES) began operations.
2010	Timothy P. Turner joined the Bank.
2013	Federal Reserve Board approved final rule on Basel III capital standards.
2013	Jody G. Street joined the Bank.
2014-12-10	Mr. Cable's Amended and Restated Executive Salary Continuation Agreements were further amended.
2015	Carol S. Shinn joined the Bank.
2015	PB Real Estate Holdings, LLC (PBREH) began operations.
2015-01-01	Basel III capital standards became effective.
2016-01-01	Capital conservation buffer for Basel III began phasing in.
2018-02-16	First Amendment to Mr. Cable's Amended and Restated Executive Salary Continuation Agreements became effective.
2019-01-01	Capital conservation buffer reached 2.5%, resulting in final minimum capital ratios.
2019	The Company redeemed $5.0 million of outstanding trust preferred securities.
2020	Jeffrey Hooper joined the Company and the Bank.
2020-05-07	2020 Omnibus Stock Ownership and Long-Term Incentive Plan approved by shareholders.
2020-07-01	Executive Salary Continuation Agreement with Mr. Hooper became effective.
2020-11	Christine S. Abernethy passed away.
2021-08	Employment agreement with Mr. Hooper entered into.
2022-01-20	1,430 restricted stock units granted to Mr. Hooper (vested January 20, 2026).
2022-03	FOMC began increasing target federal funds rate.
2023-01-01	Current Expected Credit Loss (CECL) methodology adopted.
2023-01-19	1,230 restricted stock units granted to Mr. Cable (vest January 19, 2027).
2023-01-19	770 restricted stock units granted to Mr. Street (vest January 19, 2027).
2023-07	FOMC completed target federal funds rate increases.
2023-09-15	Trust preferred securities began accruing interest at three-month SOFR plus 189 basis points.
2023-10	Compensation Committee adopted and Board ratified the Excess Incentive-Based Compensation Recovery Policy (Clawback Policy).
2023-11	First Amendment to Employment Agreement with named executive officers to comply with the Clawback Policy.
2024	FOMC reduced the target federal funds rate to a range of 4.25% to 4.50%.
2024-01-22	1,360 restricted stock units granted to Mr. Hooper (vest January 22, 2028).
2024-05-01	2025 Annual Meeting of Shareholders held.
2024-06	Board of Directors authorized a $2.0 million stock repurchase program (expired February 28, 2025).
2024-09	William D. Cable, Sr. promoted to President and Chief Executive Officer of the Company and the Bank.
2024-09-19	Second Amendment to Mr. Cable's Amended and Restated Executive Salary Continuation Agreement became effective.
2024-09-19	First Amendment to Executive Salary Continuation Agreement with Mr. Hooper became effective.
2025-01-01	Executive Salary Continuation Agreement with Jody G. Street became effective.
2025-02-03	1,070 restricted stock units granted to Mr. Street (vest February 3, 2029).
2025-02-28	Stock repurchase program authorized in June 2024 expired.
2025-03	Board of Directors authorized a $3.0 million stock repurchase program (expired February 28, 2026).
2025-12-31	Fiscal year end for financial statements.
2025-12-31	Target federal funds rate lowered to a range of 3.50% to 3.75%.
2026-02-28	Stock repurchase program authorized in March 2025 expired.
2026-03-06	Record date for shareholders entitled to notice of and to vote at the 2026 Annual Meeting.
2026-03-11	Date of Independent Registered Public Accounting Firm's report.
2026-03-25	Proxy Statement mailed to shareholders.
2026-03	Mr. Timmerman Jr. passed away.
2026-05-06	Deadline for shareholders to email Corporate Secretary to participate in the virtual Annual Meeting.
2026-05-07	2026 Annual Meeting of Shareholders.
2026-11-25	Deadline for shareholder proposals to be included in the Company's proxy materials for the 2027 Annual Meeting.
2026-12-15	Effective date for ASU 2023-09 (Income Taxes) for annual reporting periods.
2026-12-15	Effective date for ASU 2024-03 (Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures) for annual reporting periods.
2027-02-08	Deadline for shareholder proposals to be presented from the floor at the 2027 Annual Meeting.
2027-05-06	Anticipated date for the 2027 Annual Meeting of Shareholders.
2027-12-15	Effective date for ASU 2025-01 (Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures) for interim periods within annual reporting periods.
2030-05-07	2020 Omnibus Stock Ownership and Long-Term Incentive Plan expires.
2036-09-15	Junior subordinated debentures mature.

Recommendation

hold

The filing indicates strong financial performance for 2025 with significant increases in net earnings, profitability ratios, and improved asset quality. The company maintains a robust capital position, exceeding regulatory requirements. However, the filing is a proxy statement, not an earnings release, and the financial data is for a past period (year ended Dec 31, 2025). While the results are positive, there are no new strategic announcements or catalysts that would warrant a 'buy' recommendation based solely on this filing. The increase in provision for credit losses and rising non-interest expenses warrant continued monitoring. Therefore, a 'hold' recommendation is appropriate, suggesting investors maintain their current positions while observing future developments.

Keywords

Peoples Bancorp, PEBK, Banking, Financial Services, North Carolina, Community Bank, SEC Filing, Proxy Statement, Earnings, Net Interest Income, Loan Growth, Capital Ratios, Executive Compensation, Corporate Governance, Risk Management, Shareholder Meeting

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