Peoples Bancorp of North Carolina (PEBK) Q3 2024 earnings summary

Executive summary

• Net earnings for Q3 2024 were $4.0 million ($0.74 per share), down from $4.1 million ($0.76 per share) in Q3 2023, mainly due to higher non-interest expense and lower non-interest income, partially offset by higher net interest income and lower provision for credit losses.

• For the nine months ended September 30, 2024, net earnings rose to $12.8 million ($2.41 per share) from $12.1 million ($2.22 per share) year-over-year, driven by higher non-interest income and lower provision for credit losses, offset by lower net interest income and higher non-interest expense.

• Annualized return on average assets was 0.95% for the nine months ended September 30, 2024, compared to 1.02% a year ago; annualized return on average equity was 13.59% versus 13.97%.

Financial highlights

• Net interest income for Q3 2024 was $13.5 million, up from $13.3 million in Q3 2023; for the nine months, it was $40.3 million, down from $41.4 million year-over-year.

• Interest income for Q3 2024 was $20.5 million, up from $18.3 million in Q3 2023, mainly due to higher loan balances and rates; interest expense increased to $6.9 million from $5.0 million.

• Non-interest income for Q3 2024 was $7.1 million, up from $6.8 million in Q3 2023; for the nine months, it was $20.7 million, up from $16.8 million, aided by higher appraisal management fees and a swing from net securities losses to gains.

• Non-interest expense for Q3 2024 was $15.0 million, up from $14.3 million in Q3 2023, mainly due to higher occupancy, appraisal management, and professional fees.

• Allowance for credit losses on loans was $10.6 million at September 30, 2024, down from $11.0 million at December 31, 2023; net charge-offs for the nine months were $956,000, up from $297,000 year-over-year.

• Total assets were $1.66 billion at September 30, 2024, up from $1.64 billion at December 31, 2023; total loans were $1.12 billion, up from $1.09 billion.

• Deposits rose to $1.48 billion at September 30, 2024, from $1.39 billion at year-end 2023.

Outlook and guidance

• Management expects continued growth in local markets and through expansion opportunities, with no immediate need for acquisitions.

• The company remains focused on maintaining strong liquidity, asset quality, and capital levels to manage economic and interest rate risks.