Peoples Bancorp Announces Fourth Quarter and Full Year 2025 Results

NEWTON, NC / ACCESS Newswire / January 26, 2026 / Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK) (the "Company"), the parent company of Peoples Bank (the "Bank"), reported fourth quarter and full year 2025 results with highlights as follows:

Fourth quarter 2025 highlights:

During the three months ended December 31, 2025, the Bank recognized a $3.0 million net gain on the North Carolina Department of Transportation ("NCDOT") eminent domain acquisition of the Bank's former Mooresville branch office, situated on NC Highway 150 in Mooresville, NC for the widening of NC Highway 150.

Net interest margin was 3.62% for the three months ended December 31, 2025, compared to 3.39% for the three months ended December 31, 2024.

Full year 2025 highlights:

Net earnings were $19.8 million or $3.74 per share and $3.62 per diluted share for the year ended December 31, 2025, as compared to $16.4 million or $3.08 per share and $2.98 diluted share for the prior year.

Cash dividends were $0.96 per share for the year ended December 31, 2025, compared to $0.92 per share for the prior year.

Total loans were $1.20 billion at December 31, 2025, compared to $1.14 billion at December 31, 2024.

Non-performing assets were $4.2 million or 0.25% of total assets at December 31, 2025, compared to $4.8 million or 0.29% of total assets at December 31, 2024.

Total deposits were $1.51 billion at December 31, 2025, compared to $1.48 billion at December 31, 2024.

Core deposits, a non-GAAP measure, were $1.35 billion or 89.44% of total deposits at December 31, 2025, compared to $1.34 billion or 90.17% of total deposits at December 31, 2024.

Shareholders' equity was $157.1 million, or 9.23% of total assets, at December 31, 2025, compared to $130.6 million, or 7.90% of total assets, at December 31, 2024.

Net interest margin was 3.57% for the year ended December 31, 2025, compared to 3.36% for the year ended December 31, 2024.

Net earnings were $6.6 million or $1.25 per share and $1.21 per diluted share for the three months ended December 31, 2025, as compared to $3.6 million or $0.67 per share and $0.65 per diluted share for the prior year period. William D. Cable, Sr., President and Chief Executive Officer, attributed the increase in fourth quarter net earnings to increases in net interest income and non-interest income and a decrease in non-interest expense, which were partially offset by an increase in the provision for credit losses, compared to the prior year period, as discussed below.

Net interest income was $15.4 million for the three months ended December 31, 2025, compared to $13.8 million for the three months ended December 31, 2024. The increase in net interest income is due to a $1.1 million increase in interest income and a $410,000 decrease in interest expense. The increase in interest income is primarily due to a $1.3 million increase in interest income and fees on loans and a $219,000 increase in interest income on balances due from banks, which was partially offset by a $382,000 decrease in interest income on investment securities. The increase in interest income and fees on loans is primarily due to an increase in total loans. The increase in interest income on balances due from banks is primarily due to an increase in average balances outstanding. The decrease in interest income on investment securities is due to a reduction in balances outstanding and decreases in yields on variable rate securities. The decrease in interest expense is primarily due to a decrease in rates paid on interest-bearing liabilities resulting from rate decreases implemented by the Federal Reserve. Net interest income after the provision for credit losses was $15.0 million for the three months ended December 31, 2025, compared to $14.0 million for the three months ended December 31, 2024. The provision for credit losses for the three months ended December 31, 2025 was an expense of $353,000, compared to a recovery of $205,000 for the three months ended December 31, 2024. The increase in the provision for credit losses is primarily attributable to a $609,000 decrease in the reserve for losses associated with Hurricane Helene during the fourth quarter of 2024, which resulted in a recovery in the fourth quarter of 2024, compared to an expense in the fourth quarter of 2025.

Non-interest income was $9.6 million for the three months ended December 31, 2025, compared to $7.1 million for the three months ended December 31, 2024. The increase in non-interest income is primarily attributable to a $3.0 million net gain on the NCDOT eminent domain acquisition of the Bank's former Mooresville branch office during the three months ended December 31, 2025, which was partially offset by a $386,000 decrease in miscellaneous non-interest income primarily due to bank owned life insurance (BOLI) death benefit proceeds of $313,000 received during the three months ended December 31, 2024, compared to no BOLI death benefit proceeds during the three months ended December 31, 2025.

Non-interest expense was $15.9 million for the three months ended December 31, 2025, compared to $16.5 million for the three months ended December 31, 2024. The decrease in non-interest expense is primarily attributable to a $605,000 decrease in salaries and employee benefits expense primarily due to a decrease in salary and supplemental executive retirement plan expenses and a $620,000 decrease in other non-interest expense primarily due to a decrease in legal expenses. The Bank recorded $553,000 in legal expenses associated with the NCDOT litigation during the three months ended September 30, 2025. These legal expenses were subsequently reclassified to offset the $3.6 million gain on the involuntarily disposal of this property upon receiving the formal written order from the court during the three months ended December 31, 2025, which resulted in the $3.0 million net gain noted above. The decreases in non-interest expense were partially offset by a $560,000 increase in occupancy expense primarily due to an increase in furniture and equipment maintenance/services expenses.

Net earnings were $19.8 million or $3.74 per share and $3.62 per diluted share for the year ended December 31, 2025, as compared to $16.4 million or $3.08 per share and $2.98 per diluted share for the prior year. The increase in net earnings is primarily attributable to increases in net interest income and non-interest income, which were partially offset by an increase in the provision for credit losses and an increase in non-interest expense, compared to the prior year, as discussed below.

Net interest income was $59.0 million for the year ended December 31, 2025, compared to $54.1 million for the year ended December 31, 2024. The increase in net interest income is due to a $2.9 million increase in interest income and a $2.1 million decrease in interest expense. The increase in interest income is primarily due to a $4.3 million increase in interest income and fees on loans and a $44,000 increase in interest income on balances due from banks, which was partially offset by a $1.5 million decrease in interest income on investment securities. The increase in interest income and fees on loans is primarily due to an increase in total loans. The increase in interest income on balances due from banks is primarily due to an increase in average balances outstanding. The decrease in interest income on investment securities is due to a reduction in balances outstanding and decreases in yields on variable rate securities. The decrease in interest expense is primarily due to a decrease in rates paid on interest-bearing liabilities resulting from rate decreases implemented by the Federal Reserve. Net interest income after the provision for credit losses was $58.1 million for the year ended December 31, 2025, compared to $54.4 million for the year ended December 31, 2024. The provision for credit losses for the year ended December 31, 2025 was an expense of $938,000, compared to a recovery of $285,000 for the year ended December 31, 2024. The increase in the provision for credit losses is primarily attributable to a $66.0 million increase in total loans and a $18.0 million increase in unfunded loan commitments from December 31, 2024 to December 31, 2025, which were partially offset by a $925,000 decrease in net charge-offs during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Non-interest income was $31.0 million for the year ended December 31, 2025, compared to $27.7 million for the year ended December 31, 2024. The increase in non-interest income is primarily attributable to a $3.0 million net gain during the year ended December 31, 2025 on the NCDOT eminent domain acquisition of the Bank's former Mooresville branch office and a $2.0 million increase in appraisal management fee income due to an increase in appraisal volume. The increases in non-interest income were partially offset by a $1.6 million decrease in miscellaneous non-interest income primarily due to a decrease in income on small business investment company (SBIC) investments and a decrease in deferred compensation income.

Non-interest expense was $63.2 million for the year ended December 31, 2025, compared to $61.2 million for the year ended December 31, 2024. The increase in non-interest expense is primarily attributable to a $1.6 million increase in appraisal management fee expense due to an increase in appraisal volume and a $262,000 increase in occupancy expense primarily due to an increase in furniture and equipment maintenance/services expenses.

Income tax expense was $2.1 million for the three months ended December 31, 2025, compared to $1.0 million for the three months ended December 31, 2024. The effective tax rate was 24.31% for the three months ended December 31, 2025, compared to 22.44% for the three months ended December 31, 2024. The increase in the effective tax rate is primarily due to a $109,000 deferred tax asset write-off during the three months ended December 31, 2025. Income tax expense was $6.0 million for the year ended December 31, 2025, compared to $4.6 million for the year ended December 31, 2024. The effective tax rate was 23.29% for the year ended December 31, 2025, compared to 21.86% for the year ended December 31, 2024. The increase in the effective tax rate is primarily due to a $322,000 interest receivable booked during the year ended December 31, 2024 on a deposit for taxes paid prior to a settlement with the North Carolina Department of Revenue to withdraw the disallowance of certain tax credits previously purchased by the Bank.

Total assets were $1.70 billion as of December 31, 2025, compared to $1.65 billion as of December 31, 2024. Available for sale securities were $377.4 million as of December 31, 2025, compared to $388.0 million as of December 31, 2024. Total loans were $1.20 billion as of December 31, 2025, compared to $1.14 billion at December 31, 2024.

Non-performing assets were $4.2 million or 0.25% of total assets at December 31, 2025, compared to $4.8 million or 0.29% of total assets at December 31, 2024. Non-performing assets comprise $3.6 million in residential mortgage loans and $533,000 in commercial mortgage loans at December 31, 2025, compared to $3.7 million in residential mortgage loans, $463,000 in commercial mortgage loans, $257,000 in other loans, and $369,000 in other real estate owned at December 31, 2024.

The allowance for credit losses on loans was $10.1 million or 0.84% of total loans at December 31, 2025, compared to $10.0 million or 0.88% of total loans at December 31, 2024. The allowance for credit losses on loans increased $131,000 primarily due to a $66.0 million increase in total loans from December 31, 2024 to December 31, 2025, which was partially offset by a $925,000 decrease in net charge-offs during the year ended December 31, 2025, compared to the year ended December 31, 2024. The allowance for credit losses on unfunded commitments was $1.4 million at December 31, 2025, compared to $1.1 million at December 31, 2024. The increase in the allowance for credit losses on unfunded commitments was due to a $18.0 million increase in unfunded loan commitments from December 31, 2024 to December 31, 2025. The allowance for credit losses on unfunded commitments is included in other liabilities on the Company's consolidated balance sheets. Management believes the current level of the allowance for credit losses is adequate; however, there is no guarantee that additional adjustments to the allowance will not be required because of changes in economic conditions, regulatory requirements or other factors.

Deposits were $1.51 billion as of December 31, 2025, compared to $1.48 billion as of December 31, 2024. Core deposits, a non-GAAP measure, which include noninterest-bearing demand deposits, NOW, MMDA, savings and non-brokered certificates of deposit of denominations of $250,000 or less, were $1.35 billion at December 31, 2025, compared to $1.34 billion at December 31, 2024. Management believes it is useful to calculate and present core deposits because of the positive impact this low cost funding source provides to the Bank's overall cost of funds and profitability. Certificates of deposit in amounts of more than $250,000 totaled $159.4 million at December 31, 2025, compared to $145.9 million December 31, 2024.

Junior subordinated debentures were $15.5 million at December 31, 2025 and December 31, 2024. Shareholders' equity was $157.1 million, or 9.23% of total assets, at December 31, 2025, compared to $130.6 million, or 7.90% of total assets, at December 31, 2024. The increase in shareholders' equity is primarily due an increase in net income and a decrease in the unrealized loss on investment securities available for sale due to rate changes between December 31, 2024 and December 31, 2025.

Peoples Bank operates 15 banking offices in North Carolina, with offices in Catawba, Alexander, Lincoln, Mecklenburg and Iredell Counties. The Bank also operates loan production offices in Lincoln, Mecklenburg, Rowan and Forsyth Counties. The Company's common stock is publicly traded and is listed on the Nasdaq Global Market under the symbol "PEBK."

Statements made in this earnings 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 involve risks and uncertainties and are based on the beliefs and assumptions of management and on the information available to management at the time that this release was prepared. These statements can be identified by the use of words like "expect," "anticipate," "estimate," and "believe," variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, (1) competition in the markets served by the Bank, (2) changes in the interest rate environment, (3) 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, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environment and tax laws, (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations and (7) other risks and factors identified in the Company's other filings with the Securities and Exchange Commission, including but not limited to those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Contact: William D. Cable, Sr.

President and Chief Executive Officer

Jeffrey N. Hooper

Executive Vice President and Chief Financial Officer

828-464-5620

CONSOLIDATED BALANCE SHEETS

December 31, 2025 and 2024

(Dollars in thousands)

December 31, 2025

December 31, 2024

(Unaudited)

(Audited)

27,721

30,919

30,384

28,347

58,105

59,266

377,363

388,003

2,595

2,728

379,958

390,731

1,136

1,367

1,204,388

1,138,404

(10,126

)

(9,995

)

1,194,262

1,128,409

14,162

14,847

17,837

17,675

36,688

39,667

1,702,148

1,651,962

394,563

402,254

760,883

741,363

159,389

145,939

194,390

195,175

1,509,225

1,484,731

15,464

20,341

21,204

1,545,030

1,521,399

48,708

48,658

(1,510

)

(1,757

)

1,510

1,757

135,645

121,062

(27,235

)

(39,157

)

157,118

130,563

1,702,148

1,651,962

CONSOLIDATED STATEMENTS OF INCOME

For the three months and years ended December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Three months ended

Years ended

December 31,

2025

2024

2025

2024

(Unaudited)

(Audited)

17,413

16,113

67,251

62,920

775

556

2,840

2,796

2,073

2,334

8,411

9,979

690

694

2,772

2,779

572

689

2,344

2,259

21,523

20,386

83,618

80,733

2,864

2,847

11,113

10,237

3,070

3,396

12,529

14,316

232

266

959

1,116

985

6,166

6,576

24,601

26,654

15,357

13,810

59,017

54,079

353

(205

)

938

(285

)

15,004

14,015

58,079

54,364

1,391

1,452

5,579

5,653

170

158

696

685

(74

)

(78

)

3,009

110

327

357

281

272

1,026

989

3,068

3,023

13,684

11,691

1,676

2,062

6,737

8,335

9,631

7,061

30,980

27,715

7,195

7,800

28,245

28,209

2,584

2,024

8,948

8,686

2,450

2,400

10,883

9,263

3,643

4,263

15,133

14,992

15,872

16,487

63,209

61,150

8,763

4,589

25,850

20,929

2,130

1,030

6,020

4,576

6,633

3,559

19,830

16,353

1.25

0.67

3.74

3.08

1.21

0.65

3.62

2.98

0.20

0.19

0.96

0.92

29.59

24.64

29.59

24.64

FINANCIAL HIGHLIGHTS

For the three months and years ended December 31, 2025 and 2024

(Dollars in thousands)

Three months ended

Years ended

December 31,

2025

2024

2025

2024

(Unaudited)

(Audited)

413,454

439,338

418,469

442,097

1,191,020

1,131,787

1,165,212

1,113,488

1,684,913

1,620,669

1,653,293

1,611,816

1,731,451

1,662,314

1,695,711

1,653,356

1,550,863

1,493,385

1,525,479

1,465,965

152,593

131,522

148,795

129,866

3.62

3.39

3.57

3.36

1.52

0.85

1.17

0.99

17.25

10.77

13.33

12.59

8.81

7.91

8.77

7.85

December 31, 2025

December 31, 2024

(Unaudited)

(Audited)

10,126

9,995

1,403

1,101

938

(285

)

(852

)

(1,981

)

347

551

4,176

4,440

369

4,176

4,809

0.25

0.29

242.48

207.84

0.84

0.88

0.24

0.33

19.42

19.87

72.92

72.24

6.71

6.45

0.30

0.57

0.41

0.54

0.00

At December 31, 2025, including non-accrual loans, there were no relationships exceeding $1.0 million Watch and Substandard risk grades. At December 31, 2024, including non-accrual loans, there was one relationship exceeding $1.0 million in the Watch risk grade, which totaled $1.5 million; there were no relationships exceeding $1.0 million in the Substandard risk grade.

(1) This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed using an effective tax rate of 22.78% and is reduced by the related nondeductible portion of interest expense.

(2) For the years ended December 31, 2025 and 2024.

SOURCE: Peoples Bancorp of North Carolina, Inc.