Peoples Bancorp Announces First Quarter Earnings Increase

Apr 16, 2001, 01:00 ET from Peoples Bancorp of North Carolina, Inc.

    NEWTON, N.C., April 16 /PRNewswire/ --
     Peoples Bancorp of North Carolina, Inc. (Nasdaq-NM: PEBK), the parent
 company of Peoples Bank, reported an increase in quarterly net income of
 8 percent for the first quarter ended March 31, 2001.   Consolidated net
 income totaled $1,371,017 or $.43 basic income per share for the quarter ended
 March 31, 2001 as compared to  $1,269,624 or $.39 basic income per share for
 the same period one year ago.  These financial results produced an annualized
 return on average assets of 1.04% and an annualized return on average
 shareholders' equity of 12.28% as of March 31, 2001 as compared to annualized
 returns of 1.17% and 13.04%, respectively as of March 31, 2000.
     Tony W. Wolfe, President and Chief Executive Officer, attributed the
 growth in earnings primarily to an increase in non-interest income.
 Non-interest income totaled  $1,601,899 for the three months ended March 31,
 2001, representing an increase of 86 percent when compared to $862,637 for the
 same period one year ago.  This increase reflects an improvement in mortgage
 banking income resulting from strong demand of mortgage loan services.  The
 increase also reflects accounting treatment associated with the increase in
 value of an interest rate floor contract, increased income from appraisal
 related services, and fees arising from a new service designed to
 automatically advance funds to assist in the event of checking overdrafts.
 The increase in non-interest income was partially offset by a decrease in net
 interest income.
     Net interest income after provision for loan losses decreased 4 percent to
 $4,600,658 for the three months ended March 31, 2001 compared to $4,805,935
 for the same period last year.  The decrease in net interest income is
 attributable to declining interest rates during first quarter 2001.
     Peoples Bancorp continued its trend of strong balance sheet growth during
 the first quarter.  Total assets as of March 31, 2001 amounted to
 $540,308,097, an increase of 20 percent compared to total assets of
 $450,855,092 as of March 31, 2000.  Wolfe attributed the Company's sustained
 asset growth to a continuation of strong loan demand in the Bank's market
 area.  Loans increased 22 percent to $432,112,456 as of March 31, 2001
 compared to $353,387,738 as of March 31, 2000.  In response to growth in the
 loan portfolio, management accordingly funded the allowance for loan losses in
 the amount of $429,500 for the three months ended March 31, 2001.  Such
 funding reflects a precautionary approach in response to declining economic
 conditions.  The ratio between the allowance for loan losses to total loans
 was 1.18% as of March 31, 2001 as compared to 1.11% one year ago.
     The Company also continues to experience impressive deposit growth.
 Deposits amounted to $469,416,089 as of March 31, 2001, representing an
 increase of 19 percent over deposits of $393,979,450 at March 31, 2000.
     The Company has now completed its transition into the new Peoples Bancorp
 Center, located in the Crossroads Shopping Center at the intersection of US
 Highway 321 Business and NC Highway 10 in Newton.  Support staff employees
 from five locations throughout Catawba County are now located at the Corporate
 Center.  "We are already experiencing the benefits of increased workplace
 efficiencies as a result of the consolidation of corporate and support
 services into one location," Wolfe added.
     In conjunction with the opening of the Peoples Bancorp Center, Peoples
 Bank has relocated its downtown Newton branch facility to 420 West A Street.
 The Bank opened its new downtown Newton Office on March 27.  Grand opening
 festivities and an official ribbon cutting ceremony will be held in May.
     Peoples Bank operates nine offices throughout Catawba County, one office
 in Alexander County and two offices in Lincoln County.   The Bank has recently
 celebrated grand opening ceremonies at both Lincoln County locations.  The
 Bank's full service Lincolnton Branch, located at 1910 East Main Street,
 celebrated its grand opening the week of February 12.  The Bank also
 celebrated the grand opening of its Triangle Crossing Branch the week of
 February 26.  The new Triangle Crossing Branch was constructed to replace the
 modular building that had been in use since the branch opened in 1997.
     The Company's common stock is publicly traded over the counter and is
 quoted on the Nasdaq National Market under the symbol "PEBK."  The stock is
 marketed locally by Scott and Stringfellow, Inc. and IJL/Wachovia.  The Annual
 Shareholders' Meeting of the Company will be held May 3, 2001.
 
     Statements made in this press release, other than those concerning
 historical information, should be considered forward-looking statements
 pursuant to the safe harbor provisions of the Securities Exchange Act of 1934
 and the Private Securities Litigation Act of 1995.  These forward-looking
 statements are based on information currently available to management and are
 subject to various risks and uncertainties, including but not limited to those
 described in Peoples Bancorp of North Carolina, Inc.'s annual report on Form
 10-K for the year ended December 31, 2000, under "Special Cautionary Notice
 Regarding Forward Looking Statements" and otherwise in the Company's reports
 and filings.
 
 
     CONSOLIDATED BALANCE SHEETS
     March 31, 2001, December 31, 2000 and March 31, 2000
 
 
 
                                                    December 31,
                                     March 31, 2001     2000     March 31, 2000
                                      (Unaudited)                 (Unaudited)
     ASSETS:
     Cash and due from banks           $14,306,300   $13,619,197   $17,969,889
     Federal funds sold                    929,000     5,020,000     3,830,000
                 Cash and cash
                  equivalents           15,235,300    18,639,197    21,799,889
 
     Investment securities available
      for sale                          69,291,690    71,564,844    62,169,268
     Other investments                   5,398,873     2,398,873     1,583,873
                 Total securities       74,690,563    73,963,717    63,753,141
 
     Loans                             432,112,456   410,939,327   353,387,738
     Mortgage loans held for sale        3,105,440     1,563,700       695,250
           Less:  Allowance for loan
            losses                      (5,115,241)   (4,713,227)   (3,922,219)
                 Net loans             430,102,655   407,789,800   350,160,769
 
     Premises and equipment, net        14,556,180    12,907,968     9,319,494
     Accrued interest receivable and
      other assets                       5,723,399     5,701,105     5,851,799
                 Total assets         $540,308,097  $519,001,787  $450,885,092
 
 
 
     LIABILITIES AND SHAREHOLDERS'
      EQUITY:
     Deposits:
           Demand                      $56,246,962   $52,793,390   $62,708,013
           Interest bearing demand      33,229,160    34,620,234    31,566,882
           Savings                      85,492,312    83,207,677    80,280,702
           Time, $100,000 or more      144,358,547   129,111,812    93,531,502
           Other time                  150,089,108   150,340,229   125,892,351
                 Total deposits        469,416,089   450,073,342   393,979,450
 
     Demand notes payable to U.S.
      Treasury                             416,054     1,600,000     1,063,382
     FHLB borrowings                    22,285,714    21,357,142    14,428,571
     Accrued interest payable and
      other liabilities                  3,431,781     2,932,284     2,645,922
                 Total liabilities     495,549,638   475,962,768   412,117,325
 
     Shareholders' Equity:
           Common stock, no par
            value; authorized
                 20,000,000 shares;
                  issued and
                  outstanding
                 3,218,714 shares in
                  2001 and 2000         36,407,798    36,407,798    36,411,571
           Retained earnings             7,676,678     6,627,533     3,484,301
           Accumulated other
            comprehensive income           673,983         3,688    (1,128,105)
                 Total shareholders'
                  equity                44,758,459    43,039,019    38,767,767
 
                 Total liabilities
                  and shareholders'
                  equity              $540,308,097  $519,001,787  $450,885,092
 
 
 
     Memorandum:  Letters of Credit     $2,014,783    $2,207,611    $3,688,476
 
 
     CONSOLIDATED STATEMENTS OF INCOME
     For the three months ended March 31, 2001 and 2000
 
 
                                                      Three months ended
                                                            March 31,
                                                      2001              2000
                                                  (Unaudited)       (Unaudited)
     INTEREST INCOME:
           Interest and fees on loans            $9,796,891        $8,079,359
           Interest on federal funds sold            31,676            21,942
           Interest on investment
            securities:
                 U.S. Treasury                           --            12,567
                 U.S. Government agencies           794,591           670,112
                 States and political
                  subdivisions                      247,422           254,859
                 Other                               64,146            38,658
                       Total interest
                        income                   10,934,726         9,077,497
 
     INTEREST EXPENSE:
           Interest bearing demand
            deposits                                 75,467           110,253
           Savings deposits                         797,408           752,277
           Time deposits                          4,692,374         2,913,530
           FHLB borrowings                          317,414           221,790
           Other                                     21,905            17,212
                       Total interest
                        expense                   5,904,568         4,015,062
     NET INTEREST INCOME                          5,030,158         5,062,435
     PROVISION FOR LOAN LOSSES                      429,500           256,500
     NET INTEREST INCOME AFTER
           PROVISION FOR LOAN LOSSES              4,600,658         4,805,935
 
     OTHER INCOME:
           Service charges                          609,960           371,446
           Other service charges and fees           128,374            94,732
           Gain (loss) on sale of
            securities                               (8,736)               --
           Mortgage banking income                  204,827            89,909
           Insurance and brokerage
            commission                               55,043            26,500
           Miscellaneous                            612,431           280,050
                       Total other income         1,601,899           862,637
     OTHER EXPENSES:
           Salaries and employee benefits         2,447,965         2,221,395
           Occupancy                                694,800           591,834
           Other                                  1,016,975           979,719
                       Total other
                        expenses                  4,159,740         3,792,948
 
     INCOME BEFORE INCOME TAXES                   2,042,817         1,875,624
     INCOME TAXES                                   671,800           606,000
 
     NET INCOME                                  $1,371,017        $1,269,624
     PER SHARE AMOUNTS*
     Basic net income                                 $0.43             $0.39
     Cash dividends                                   $0.10             $0.09
     Book value                                      $13.91            $12.04
 
     *Restated to reflect a 10% stock
      dividend during second quarter 2000.
 
 
     FINANCIAL HIGHLIGHTS
     For the three months March 31, 2001
      and 2000
 
 
                                                     Three months ended
                                                           March 31,
                                                    2001              2000
                                                (Unaudited)       (Unaudited)
     SELECTED AVERAGE BALANCES:
           Investment Securities Portfolio      $68,821,904       $64,587,761
           Loans                                424,151,414       347,123,728
           Earning Assets                       498,351,813       415,969,464
           Assets                               529,203,755       434,987,964
           Deposits                             459,465,041       378,441,905
           Shareholders' Equity                  44,659,315        38,952,538
 
 
     SELECTED KEY DATA:
           Net Interest Margin (tax
            equivalent)                               4.20%             5.01%
           Return on Average Assets                   1.04%             1.17%
           Return on Average Shareholders'
            Equity                                   12.28%            13.04%
           Shareholders' Equity to Total
            Assets (Period End)                       8.28%             8.60%
 
 
     ALLOWANCE FOR LOAN LOSSES:
           Balance, beginning of period          $4,713,227        $3,924,348
           Provision for loan losses                429,500           256,500
           Charge-offs                              (63,637)         (275,501)
           Recoveries                                36,151            16,872
           Balance, end of period                $5,115,241        $3,922,219
 
 
     ASSET QUALITY:
           Nonaccrual Loans                      $5,344,698        $2,629,071
           90 Days Past Due and still
            accruing                                     --            78,128
           Other Real Estate Owned                  195,000            44,350
           Total Nonperforming Assets            $5,539,698        $2,751,549
           Nonperforming Assets to Total
            Assets                                    1.03%             0.61%
           Allowance for Loan Losses to
            Nonperforming Assets                     92.34%           142.55%
           Allowance for Loan Losses to
            Total Loans                               1.18%             1.11%
 
 

SOURCE Peoples Bancorp of North Carolina, Inc.
    NEWTON, N.C., April 16 /PRNewswire/ --
     Peoples Bancorp of North Carolina, Inc. (Nasdaq-NM: PEBK), the parent
 company of Peoples Bank, reported an increase in quarterly net income of
 8 percent for the first quarter ended March 31, 2001.   Consolidated net
 income totaled $1,371,017 or $.43 basic income per share for the quarter ended
 March 31, 2001 as compared to  $1,269,624 or $.39 basic income per share for
 the same period one year ago.  These financial results produced an annualized
 return on average assets of 1.04% and an annualized return on average
 shareholders' equity of 12.28% as of March 31, 2001 as compared to annualized
 returns of 1.17% and 13.04%, respectively as of March 31, 2000.
     Tony W. Wolfe, President and Chief Executive Officer, attributed the
 growth in earnings primarily to an increase in non-interest income.
 Non-interest income totaled  $1,601,899 for the three months ended March 31,
 2001, representing an increase of 86 percent when compared to $862,637 for the
 same period one year ago.  This increase reflects an improvement in mortgage
 banking income resulting from strong demand of mortgage loan services.  The
 increase also reflects accounting treatment associated with the increase in
 value of an interest rate floor contract, increased income from appraisal
 related services, and fees arising from a new service designed to
 automatically advance funds to assist in the event of checking overdrafts.
 The increase in non-interest income was partially offset by a decrease in net
 interest income.
     Net interest income after provision for loan losses decreased 4 percent to
 $4,600,658 for the three months ended March 31, 2001 compared to $4,805,935
 for the same period last year.  The decrease in net interest income is
 attributable to declining interest rates during first quarter 2001.
     Peoples Bancorp continued its trend of strong balance sheet growth during
 the first quarter.  Total assets as of March 31, 2001 amounted to
 $540,308,097, an increase of 20 percent compared to total assets of
 $450,855,092 as of March 31, 2000.  Wolfe attributed the Company's sustained
 asset growth to a continuation of strong loan demand in the Bank's market
 area.  Loans increased 22 percent to $432,112,456 as of March 31, 2001
 compared to $353,387,738 as of March 31, 2000.  In response to growth in the
 loan portfolio, management accordingly funded the allowance for loan losses in
 the amount of $429,500 for the three months ended March 31, 2001.  Such
 funding reflects a precautionary approach in response to declining economic
 conditions.  The ratio between the allowance for loan losses to total loans
 was 1.18% as of March 31, 2001 as compared to 1.11% one year ago.
     The Company also continues to experience impressive deposit growth.
 Deposits amounted to $469,416,089 as of March 31, 2001, representing an
 increase of 19 percent over deposits of $393,979,450 at March 31, 2000.
     The Company has now completed its transition into the new Peoples Bancorp
 Center, located in the Crossroads Shopping Center at the intersection of US
 Highway 321 Business and NC Highway 10 in Newton.  Support staff employees
 from five locations throughout Catawba County are now located at the Corporate
 Center.  "We are already experiencing the benefits of increased workplace
 efficiencies as a result of the consolidation of corporate and support
 services into one location," Wolfe added.
     In conjunction with the opening of the Peoples Bancorp Center, Peoples
 Bank has relocated its downtown Newton branch facility to 420 West A Street.
 The Bank opened its new downtown Newton Office on March 27.  Grand opening
 festivities and an official ribbon cutting ceremony will be held in May.
     Peoples Bank operates nine offices throughout Catawba County, one office
 in Alexander County and two offices in Lincoln County.   The Bank has recently
 celebrated grand opening ceremonies at both Lincoln County locations.  The
 Bank's full service Lincolnton Branch, located at 1910 East Main Street,
 celebrated its grand opening the week of February 12.  The Bank also
 celebrated the grand opening of its Triangle Crossing Branch the week of
 February 26.  The new Triangle Crossing Branch was constructed to replace the
 modular building that had been in use since the branch opened in 1997.
     The Company's common stock is publicly traded over the counter and is
 quoted on the Nasdaq National Market under the symbol "PEBK."  The stock is
 marketed locally by Scott and Stringfellow, Inc. and IJL/Wachovia.  The Annual
 Shareholders' Meeting of the Company will be held May 3, 2001.
 
     Statements made in this press release, other than those concerning
 historical information, should be considered forward-looking statements
 pursuant to the safe harbor provisions of the Securities Exchange Act of 1934
 and the Private Securities Litigation Act of 1995.  These forward-looking
 statements are based on information currently available to management and are
 subject to various risks and uncertainties, including but not limited to those
 described in Peoples Bancorp of North Carolina, Inc.'s annual report on Form
 10-K for the year ended December 31, 2000, under "Special Cautionary Notice
 Regarding Forward Looking Statements" and otherwise in the Company's reports
 and filings.
 
 
     CONSOLIDATED BALANCE SHEETS
     March 31, 2001, December 31, 2000 and March 31, 2000
 
 
 
                                                    December 31,
                                     March 31, 2001     2000     March 31, 2000
                                      (Unaudited)                 (Unaudited)
     ASSETS:
     Cash and due from banks           $14,306,300   $13,619,197   $17,969,889
     Federal funds sold                    929,000     5,020,000     3,830,000
                 Cash and cash
                  equivalents           15,235,300    18,639,197    21,799,889
 
     Investment securities available
      for sale                          69,291,690    71,564,844    62,169,268
     Other investments                   5,398,873     2,398,873     1,583,873
                 Total securities       74,690,563    73,963,717    63,753,141
 
     Loans                             432,112,456   410,939,327   353,387,738
     Mortgage loans held for sale        3,105,440     1,563,700       695,250
           Less:  Allowance for loan
            losses                      (5,115,241)   (4,713,227)   (3,922,219)
                 Net loans             430,102,655   407,789,800   350,160,769
 
     Premises and equipment, net        14,556,180    12,907,968     9,319,494
     Accrued interest receivable and
      other assets                       5,723,399     5,701,105     5,851,799
                 Total assets         $540,308,097  $519,001,787  $450,885,092
 
 
 
     LIABILITIES AND SHAREHOLDERS'
      EQUITY:
     Deposits:
           Demand                      $56,246,962   $52,793,390   $62,708,013
           Interest bearing demand      33,229,160    34,620,234    31,566,882
           Savings                      85,492,312    83,207,677    80,280,702
           Time, $100,000 or more      144,358,547   129,111,812    93,531,502
           Other time                  150,089,108   150,340,229   125,892,351
                 Total deposits        469,416,089   450,073,342   393,979,450
 
     Demand notes payable to U.S.
      Treasury                             416,054     1,600,000     1,063,382
     FHLB borrowings                    22,285,714    21,357,142    14,428,571
     Accrued interest payable and
      other liabilities                  3,431,781     2,932,284     2,645,922
                 Total liabilities     495,549,638   475,962,768   412,117,325
 
     Shareholders' Equity:
           Common stock, no par
            value; authorized
                 20,000,000 shares;
                  issued and
                  outstanding
                 3,218,714 shares in
                  2001 and 2000         36,407,798    36,407,798    36,411,571
           Retained earnings             7,676,678     6,627,533     3,484,301
           Accumulated other
            comprehensive income           673,983         3,688    (1,128,105)
                 Total shareholders'
                  equity                44,758,459    43,039,019    38,767,767
 
                 Total liabilities
                  and shareholders'
                  equity              $540,308,097  $519,001,787  $450,885,092
 
 
 
     Memorandum:  Letters of Credit     $2,014,783    $2,207,611    $3,688,476
 
 
     CONSOLIDATED STATEMENTS OF INCOME
     For the three months ended March 31, 2001 and 2000
 
 
                                                      Three months ended
                                                            March 31,
                                                      2001              2000
                                                  (Unaudited)       (Unaudited)
     INTEREST INCOME:
           Interest and fees on loans            $9,796,891        $8,079,359
           Interest on federal funds sold            31,676            21,942
           Interest on investment
            securities:
                 U.S. Treasury                           --            12,567
                 U.S. Government agencies           794,591           670,112
                 States and political
                  subdivisions                      247,422           254,859
                 Other                               64,146            38,658
                       Total interest
                        income                   10,934,726         9,077,497
 
     INTEREST EXPENSE:
           Interest bearing demand
            deposits                                 75,467           110,253
           Savings deposits                         797,408           752,277
           Time deposits                          4,692,374         2,913,530
           FHLB borrowings                          317,414           221,790
           Other                                     21,905            17,212
                       Total interest
                        expense                   5,904,568         4,015,062
     NET INTEREST INCOME                          5,030,158         5,062,435
     PROVISION FOR LOAN LOSSES                      429,500           256,500
     NET INTEREST INCOME AFTER
           PROVISION FOR LOAN LOSSES              4,600,658         4,805,935
 
     OTHER INCOME:
           Service charges                          609,960           371,446
           Other service charges and fees           128,374            94,732
           Gain (loss) on sale of
            securities                               (8,736)               --
           Mortgage banking income                  204,827            89,909
           Insurance and brokerage
            commission                               55,043            26,500
           Miscellaneous                            612,431           280,050
                       Total other income         1,601,899           862,637
     OTHER EXPENSES:
           Salaries and employee benefits         2,447,965         2,221,395
           Occupancy                                694,800           591,834
           Other                                  1,016,975           979,719
                       Total other
                        expenses                  4,159,740         3,792,948
 
     INCOME BEFORE INCOME TAXES                   2,042,817         1,875,624
     INCOME TAXES                                   671,800           606,000
 
     NET INCOME                                  $1,371,017        $1,269,624
     PER SHARE AMOUNTS*
     Basic net income                                 $0.43             $0.39
     Cash dividends                                   $0.10             $0.09
     Book value                                      $13.91            $12.04
 
     *Restated to reflect a 10% stock
      dividend during second quarter 2000.
 
 
     FINANCIAL HIGHLIGHTS
     For the three months March 31, 2001
      and 2000
 
 
                                                     Three months ended
                                                           March 31,
                                                    2001              2000
                                                (Unaudited)       (Unaudited)
     SELECTED AVERAGE BALANCES:
           Investment Securities Portfolio      $68,821,904       $64,587,761
           Loans                                424,151,414       347,123,728
           Earning Assets                       498,351,813       415,969,464
           Assets                               529,203,755       434,987,964
           Deposits                             459,465,041       378,441,905
           Shareholders' Equity                  44,659,315        38,952,538
 
 
     SELECTED KEY DATA:
           Net Interest Margin (tax
            equivalent)                               4.20%             5.01%
           Return on Average Assets                   1.04%             1.17%
           Return on Average Shareholders'
            Equity                                   12.28%            13.04%
           Shareholders' Equity to Total
            Assets (Period End)                       8.28%             8.60%
 
 
     ALLOWANCE FOR LOAN LOSSES:
           Balance, beginning of period          $4,713,227        $3,924,348
           Provision for loan losses                429,500           256,500
           Charge-offs                              (63,637)         (275,501)
           Recoveries                                36,151            16,872
           Balance, end of period                $5,115,241        $3,922,219
 
 
     ASSET QUALITY:
           Nonaccrual Loans                      $5,344,698        $2,629,071
           90 Days Past Due and still
            accruing                                     --            78,128
           Other Real Estate Owned                  195,000            44,350
           Total Nonperforming Assets            $5,539,698        $2,751,549
           Nonperforming Assets to Total
            Assets                                    1.03%             0.61%
           Allowance for Loan Losses to
            Nonperforming Assets                     92.34%           142.55%
           Allowance for Loan Losses to
            Total Loans                               1.18%             1.11%
 
 SOURCE  Peoples Bancorp of North Carolina, Inc.