Peoples Bancorp Of North Carolina Inc 10-Q for FY2025 Q1

Peoples Bancorp Of North Carolina Inc (PEBK)

10-Q 2025-05-06 For: 2025-03-31

Added on April 12, 2026

About this 10-Q

Peoples Bancorp Of North Carolina Inc filed this 10-Q on May 6, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $4.35M; up 10.1% from net income of $3.95M a year earlier
Diluted EPS: $0.79; up 9.7% from $0.72 a year earlier

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518 West C Street, Newton, North Carolina		28658
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

		PAGE(S)
Item 1.	Financial Statements

	Consolidated Balance Sheets at March 31, 2025 (Unaudited) and December 31, 2024 (Audited)	4

	Consolidated Statements of Earnings for the three months ended March 31, 2025 and 2024 (Unaudited)	5

	Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2025 and 2024 (Unaudited)	6

	Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2025 and 2024 (Unaudited)	7

	Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited)	8-9

	Notes to Consolidated Financial Statements (Unaudited)	10-29

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30-39

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults upon Senior Securities	40

Item 5.	Other Information	40

Item 6.	Exhibits	41

Signatures		42

Certifications		43-45

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Consolidated Balance Sheets

March 31, 2025 and December 31, 2024

(Dollars in thousands)
	March 31,			December 31,
Assets	2025			2024
	(Unaudited)			(Audited)

Cash and due from banks	$	32,372			30,919
Interest-bearing deposits		70,148			28,347
Cash and cash equivalents		102,520			59,266

Investment securities available for sale		374,350			388,003
Other investments		2,674			2,728
Total securities		377,024			390,731

Mortgage loans held for sale		544			1,367

Loans		1,152,080			1,138,404
Less allowance for credit losses		(10,047	)		(9,995	)
Net loans		1,142,033			1,128,409

Premises and equipment, net		15,074			14,847
Cash surrender value of life insurance		17,796			17,675
Other real estate		125			369
Right of use lease asset		3,831			4,013
Accrued interest receivable and other assets		34,038			35,285
Total assets	$	1,692,985			1,651,962

Liabilities and Shareholders' Equity

Deposits:
Noninterest-bearing demand	$	412,761			402,254
Interest-bearing demand, MMDA & savings		756,241			741,363
Time, over $250,000		148,352			145,939
Other time		200,215			195,175
Total deposits		1,517,569			1,484,731

Junior subordinated debentures		15,464			15,464
Lease liability		3,958			4,136
Accrued interest payable and other liabilities		17,486			17,068
Total liabilities		1,554,477			1,521,399

Commitments and Contingencies

Shareholders' equity:
Preferred stock, no par value; authorized
5,000,000 shares; no shares issued and outstanding		-			-
Common stock, no par value; authorized
20,000,000 shares; issued and outstanding 5,459,441 shares
at March 31, 2025 and 5,457,646 shares at December 31, 2024		48,708			48,658
Common stock held by deferred compensation trust, at cost; 161,680
shares at March 31, 2025 and 158,580 shares at December 31, 2024		(1,842	)		(1,757	)
Deferred compensation		1,842			1,757
Retained earnings		123,439			121,062
Accumulated other comprehensive loss		(33,639	)		(39,157	)
Total shareholders' equity		138,508			130,563

Total liabilities and shareholders' equity	$	1,692,985			1,651,962

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Consolidated Statements of Earnings

Three Months Ended March 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

	2025			2024
	(Unaudited)			(Unaudited)

Interest income:
Interest and fees on loans	$	16,016			15,138
Interest on due from banks		350			907
Interest on investment securities:
U.S. Government sponsored enterprises		2,261			2,591
State and political subdivisions		694			695
Other		649			479
Total interest income		19,970			19,810

Interest expense:
Interest-bearing demand, MMDA & savings deposits		2,652			2,060
Time deposits		3,133			3,681
Junior subordinated debentures		241			284
Other		-			481
Total interest expense		6,026			6,506

Net interest income		13,944			13,304

Provision for credit losses		268			91

Net interest income after provision for credit losses		13,676			13,213

Non-interest income:
Service charges		1,412			1,340
Other service charges and fees		186			184
Loss on sale of securities, net		(4	)		-
Mortgage banking income		27			51
Insurance and brokerage commissions		237			246
Appraisal management fee income		3,042			2,414
Miscellaneous		1,629			1,803
Total non-interest income		6,529			6,038

Non-interest expense:
Salaries and employee benefits		6,788			6,980
Occupancy		2,028			2,111
Professional fees		507			392
Advertising		253			199
Debit card expense		236			312
FDIC insurance		189			191
Appraisal management fee expense		2,419			1,904
Other		2,153			2,427
Total non-interest expense		14,573			14,516

Earnings before income taxes		5,632			4,735

Income tax expense		1,287			787

Net earnings	$	4,345			3,948

Basic net earnings per share	$	0.82			0.74
Diluted net earnings per share	$	0.79			0.72
Cash dividends declared per share	$	0.36			0.35

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2025 and 2024

(Dollars in thousands)

	2025			2024
	(Unaudited)			(Unaudited)

Net earnings	$	4,345			3,948

Other comprehensive income :
Unrealized holding gains on securities available for sale		7,171			71
Reclassification adjustment for losses on securities available for sale included in net earnings		4			-

Total other comprehensive income , before income taxes		7,175			71

Income tax benefit related to other comprehensive income :

Unrealized holding gains on securities available for sale		(1,656	)		(16	)
Reclassification adjustment for losses on sales of securities available for sale included in net earnings		(1	)		-

Total income tax expense related to other comprehensive income		(1,657	)		(16	)

Total other comprehensive income, net of tax		5,518			55

Total comprehensive income	$	9,863			4,003

												Held By			Accumulated
												Deferred			Other
	Common Stock						Retained			Deferred		Compensation			Comprehensive
	Shares			Amount			Earnings			Compensation		Trust			(Loss)			Total
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)

Balance, December 31, 2024		5,457,646		$	48,658			121,062			1,757		(1,757	)		(39,157	)		130,563

Restricted stock units vested		1,795			50			-			-		-			-			50
Cash dividends declared on common stock		-			-			(1,968	)		-		-			-			(1,968	)
Equity incentive plan, net		-			-			-			85		(85	)		-			-
Net earnings		-			-			4,345			-		-			-			4,345
State tax rate reduction																(99	)		(99	)
Other comprehensive income		-			-			-			-		-			5,617			5,617
Balance, March 31, 2025		5,459,441		$	48,708			123,439			1,842		(1,842	)		(33,639	)		138,508

Balance, December 31, 2023		5,534,499		$	50,625			109,756			1,910		(1,910	)		(39,365	)		121,016

Common stock repurchase		(78,500	)		(1,998	)		-			-		-			-			(1,998	)
Cash dividends declared on common stock		-			-			(1,929	)		-		-			-			(1,929	)
Equity incentive plan, net		-			-			-			33		(33	)		-			-
Net earnings		-			-			3,948			-		-			-			3,948
Other comprehensive income		-			-			-			-		-			55			55
Balance, March 31, 2024		5,455,999		$	48,627			111,775			1,943		(1,943	)		(39,310	)		121,092

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2025 and 2024

(Dollars in thousands)

	2025			2024
	(Unaudited)			(Unaudited)

Cash flows from operating activities:
Net earnings	$	4,345			3,948
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, amortization and accretion		678			671
Provision for credit losses		268			91
Deferred income taxes		786			(208	)
Gain on sale of held for mortgage loans		(32	)		(40	)
Loss on sale of investment securities net		4			-
Write-down of premises and equipment		31			-
Gain on sale of other real estate		(17	)		-
Restricted stock expense		(27	)		6
Proceeds from sales of mortgage loans held for sale		1,564			3,137
Origination of mortgage loans held for sale		(709	)		(3,703	)
Cash surrender value of life insurance		(121	)		(116	)
Change in:
Right of use lease asset		182			178
Other assets		(1,295	)		(1,043	)
Lease liability		(178	)		(172	)
Other liabilities		445			920

Net cash provided by operating activities		5,924			3,669

Cash flows from investing activities:
Purchases of investment securities available for sale		-			(9,710	)
Proceeds from calls and maturities of investment securities available for sale		12,733			3,000
Proceeds from sales of investment securities available for sale		3,000
Proceeds from paydowns of investment securities available for sale		4,959			3,859
Proceeds from paydowns of other investment securities		123			37
Purchase of FHLB stock		(11	)		(10	)
Net change in loans		(13,892	)		(13,889	)
Purchases of premises and equipment		(763	)		(128	)
Proceeds from sale of other real estate and repossessions		261			-

Net cash provided (used) by investing activities		6,410			(16,841	)

Cash flows from financing activities:
Net change in deposits		32,838			60,319
Net change in securities sold under agreement to repurchase		-			(27,499	)
Restricted stock units vested		50			-
Common stock repurchased		-			(1,998	)
Cash dividends paid on common stock		(1,968	)		(1,929	)

Net cash provided by financing activities		30,920			28,893

Net change in cash and cash equivalents		43,254			15,721
Cash and cash equivalents at beginning of period		59,266			82,375
Cash and cash equivalents at end of period	$	102,520			98,096

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Consolidated Statements of Cash Flows, continued

Three Months Ended March 31, 2025 and 2024

(Dollars in thousands)

	2025		2024
	(Unaudited)		(Unaudited)

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	6,025		6,515
Income taxes	$	352		236

Noncash investing and financing activities:
Change in unrealized loss on investment securities available for sale, net	$	5,518		55

ASU	Description	Effective Date	Effect on Financial Statements or Other Significant Matters
ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)	The ASU requires disaggregated disclosure of income statement expenses for public business entities (PBEs).	Annual reporting periods after 12/15/26	The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position. The adoption of this guidance is expected to have an immaterial impact on disclosures.
ASU 2025-01, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220- 40)	The ASU clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.	Annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.	The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position. The adoption of this guidance is expected to have an immaterial impact on disclosures.

	For the three months ended
(dollars in thousands)	March 31, 2025			March 31, 2024

Beginning balance	$	(39,157	)	$	(39,365	)
Other comprehensive loss before reclassifications, net		5,614			55
Amounts reclassified from accumulated other comprehensive loss, net		3			-
Reduction in state tax rate adjustment, net		(99	)		-
Net current period other comprehensive loss		5,518			55
Ending balance	$	(33,639	)	$	(39,310	)

For the three months ended March 31, 2025
	Net Earnings (Dollars in thousands)		Weighted Average Number of Shares		Per Share Amount
Basic earnings per share	$	4,345		5,299,155	$	0.82
Effect of dilutive securities:
Restricted stock units - unvested				10,354
Shares held in deferred comp plan by deferred compensation trust				160,130
Diluted earnings per share	$	4,345		5,469,639	$	0.79

(Dollars in thousands)
	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasuries	$	7,983		-		585		7,398
U.S. Government sponsored enterprises		6,129		-		425		5,704
GSE - Mortgage-backed securities		232,114		161		19,422		212,853
Private label mortgage-backed securities		42,091		99		1,117		41,073
State and political subdivisions		129,594		-		22,272		107,322
Total	$	417,911		260		43,821		374,350

(Dollars in thousands)
	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasuries	$	7,981		-		724		7,257
U.S. Government sponsored enterprises		9,243		-		511		8,732
GSE - Mortgage-backed securities		248,837		162		23,207		225,792
Private label mortgage-backed securities		43,118		74		1,425		41,767
State and political subdivisions		129,659		-		25,204		104,455
Total	$	438,838		236		51,071		388,003

	·	Construction and land development loans – The risk of loss is largely dependent on the initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns. If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral.

	·	Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.

	·	Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service. These loans also involve greater risk because they are generally not fully amortizing over the loan period, but rather have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property.

	·	Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.

	·	Multifamily and farmland loans – Decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.

March 31, 2025
(Dollars in thousands)
	Loans 30-89 Days Past Due		Nonaccrual Loans		Total Past Due Loans		Total Current Loans		Total Loans		Accruing Loans 90 or More Days Past Due
Real estate loans:
Construction and land development	$	333		35		368		126,277		126,645		-
Single-family residential		3,676		4,235		7,911		379,990		387,901		-
Commercial		360		416		776		478,418		479,194		-
Multifamily and farmland		-		-		-		69,470		69,470		-
Total real estate loans		4,369		4,686		9,055		1,054,155		1,063,210		-

Loans not secured by real estate:
Commercial		-		290		290		62,932		63,222		-
Farm		-		-		-		481		481		-
Consumer		20		7		27		6,311		6,338		-
All other		-		-		-		18,829		18,829		-
Total loans	$	4,389		4,983		9,372		1,142,708		1,152,080		-

(Dollars in thousands)
	March 31, 2025
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	-		-		7,398		585		7,398		585
U.S. government sponsored enterprises		-		-		5,704		425		5,704		425
GSE -Mortgage-backed securities		16,064		284		191,926		19,138		207,990		19,422
Private label mortgage-backed securities		8,932		81		25,595		1,036		34,527		1,117
State and political subdivisions		-		-		107,322		22,272		107,322		22,272
Total	$	24,996		365		337,945		43,456		362,941		43,821

	March 31, 2025				December 31, 2024
			Allowance for				Allowance for
(Dollars in thousands)	Amortized Cost		Credit Losses		Amortized Cost		Credit Losses
Real estate loans:
Construction and land development	$	34		1		37		-
Single-family residential		4,235		26		3,720		-
Commercial		416		-		426		-
Multifamily and farmland		-		-		-		-
Total real estate loans		4,685		27		4,183		-

Loans not secured by real estate:
Commercial		261		-		248		-
Consumer		-		-		-		-
Total	$	4,946		27		4,431		-

	March 31, 2025
									Financial Assets
									Not Considered
(Dollars in thousands)	Residential Property		Developed Land		Commercial Property		Business Assets		Collateral Dependent		Total
Real estate loans:
Construction and land development	$	-		34		-		-		-		34
Single-family residential		4,235		-		-		-		-		4,235
Commercial		-		-		416		-		-		416
Multifamily and farmland		-		-		-		-		-		-
Total real estate loans		4,235		34		416		-		-		4,685

Loans not secured by real estate:
Commercial		-		-		-		261		-		261
Consumer		-		-		-		-		37		37
Total	$	4,235		34		416		261		37		4,983
Collateral Value	$	12,234		88		655		273

March 31, 2024
(Dollars in thousands)
	Payment Status (Amortized Cost Basis)
	Current		30 - 89 Days Past Due		90 + Days Past Due
Loan type:
Commercial real estate		73		-		-
Total	$	73		-		-

(Dollars in thousands)
	Real Estate Loans
	Construction and Land Development		Single-Family Residential			Commercial		Multifamily and Farmland			Commercial			Farm		Consumer and All Other			Total
Three months ended March 31, 2025
Allowance for credit losses:
Beginning balance	$	3,385		3,386			2,322		246			446			1		209			9,995
Charge-offs		-		(5	)		-		-			-			-		(107	)		(112	)
Recoveries		-		5			-		-			5			-		71			81
Provision (recovery) for
loan losses (1)		78		(24	)		15		(4	)		(12	)		-		30			83
Ending balance	$	3,463		3,362			2,337		242			439			1		203			10,047
Allowance for credit loss-loans	$	3,463		3,362			2,337		242			439			1		203			10,047
Allowance for credit losses
loan commitments		1,274		3			7		1			-			-		1			1,286
Total allowance for credit losses	$	4,737		3,365			2,344		243			439			1		204			11,333

(1) Excludes provision for credit losses related to unfunded commitments. Note 7,"Commitments and Contingencies" in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments.

	·	Pass – Includes loans ranging from excellent quality with a minimal amount of credit risk to loans with higher risk and servicing needs but still are considered to be acceptable. The higher risk loans in this category are not problem credits presently, but may be in the future if the borrower is unable to change its present course.
	·	Watch – These loans are currently performing satisfactorily, but there has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Bank’s position at some future date.
	·	Substandard – A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged (if there is any). There is a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
	·	Doubtful – Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.
	·	Loss – Loans classified Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be affected in the future.

	Term Loans by Origination Year														Revolving
															Loans
															Converted to
(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Revolving Loans		Term Loans		Total Loans
March 31, 2025
Real Estate Loans
Construction and land
development
Pass	$	11,959		43,989		28,700		26,681		4,916		9,824		-		72		126,141
Watch		-		-		-		-		441		-		-		-		441
Substandard		-		-		-		-		-		63		-		-		63
Total Construction and
land development	$	11,959		43,989		28,700		26,681		5,357		9,887		-		72		126,645
Single family
Pass	$	8,864		22,893		34,893		72,155		43,050		85,136		114,182		-		381,173
Watch		-		-		-		-		-		1,322		-		-		1,322
Substandard		-		-		31		1,345		96		3,617		317		-		5,406
Total single family	$	8,864		22,893		34,924		73,500		43,146		90,075		114,499		-		387,901
Commercial
Pass	$	14,052		57,648		45,650		137,429		69,605		148,915		2,377		-		475,676
Watch		-		-		-		453		-		2,253		-		-		2,706
Substandard		-		-		-		-		-		812		-		-		812
Total commercial	$	14,052		57,648		45,650		137,882		69,605		151,980		2,377		-		479,194
Multifamily and farmland
Pass	$	991		990		8,279		20,616		20,455		17,788		310		-		69,429
Watch		-		-		-		-		-		41		-		-		41
Substandard		-		-		-		-		-		-		-		-		-
Total multifamily and
farmland	$	991		990		8,279		20,616		20,455		17,829		310		-		69,470
Total real estate loans	$	35,866		125,520		117,553		258,679		138,563		269,771		117,186		72		1,063,210
Loans not secured by real estate
Commercial
Pass	$	2,239		8,400		12,023		5,105		2,598		12,860		19,386		-		62,611
Watch		-		-		-		136		18		166		1		-		321
Substandard		-		13		25		223		-		29		-		-		290
Total Commercial	$	2,239		8,413		12,048		5,464		2,616		13,055		19,387		-		63,222
Farm
Pass	$	51		49		190		29		-		-		162		-		481
Watch		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Total farm	$	51		49		190		29		-		-		162		-		481
Consumer
Pass	$	532		1,496		1,079		574		142		137		2,348		-		6,308
Watch		-		-		-		20		-		-		-		-		20
Substandard		-		-		-		-		-		8		2		-		10
Total consumer	$	532		1,496		1,079		594		142		145		2,350		-		6,338
All other
Pass	$	130		468		-		9,680		351		2,969		5,231		-		18,829
Watch		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Total all other	$	130		468		-		9,680		351		2,969		5,231		-		18,829
Total loans not secured
by real estate	$	2,952		10,426		13,317		15,767		3,109		16,169		27,130		-		88,870
Total loans	$	38,818		135,946		130,870		274,446		141,672		285,940		144,316		72		1,152,080

March 31, 2025	Gross Loan Charge-offs by Origination Year														Revolving
															Loans
(dollars in thousands)													Revolving		Converted to		Total
	2025		2024		2023		2022		2021		Prior		Loans		Term Loans		Loans
Real estate loans:
Construction and land development	$	-		-		-		-		-		-		-		-		-
Single-family residential		-		-		-		-		-		5		-		-		5
Commercial		-		-		-		-		-		-		-		-		-
Multifamily and farmland		-		-		-		-		-		-		-		-		-
Total real estate loans		-		-		-		-		-		5		-		-		5
Loans not secured by real estate:
Commercial		-		-		-		-		-		-		-		-		-
Consumer		-		5		-		-		-		102		-		-		107
All other		-		-		-		-		-		-		-		-		-

Total gross charge-offs	$	-		5		-		-		-		107		-		-		112

(Dollars in thousands)

Maturity Analysis of Operating Lease Liabilities:	March 31, 2025

2025	$	567
2026		650
2027		612
2028		510
2029		422
Thereafter		1,694
Total		4,455
Less: Imputed Interest		(497	)
Operating Lease Liability	$	3,958

(Dollars in thousands)
	Contractual Amount
	3/31/25		12/31/24
Financial instruments whose contract amount represent credit risk:

Commitments to extend credit	$	347,461	$	348,876

Standby letters of credit	$	1,607	$	1,675

	·	Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.
	·	Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
	·	Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

(Dollars in thousands)
	March 31, 2025
	Fair Value Measurements		Level 1 Valuation		Level 2 Valuation		Level 3 Valuation
U.S. Treasuries	$	7,398		-		7,398		-
U.S. Government sponsored enterprises		5,704		-		5,704		-
GSE - Mortgage-backed securities		212,853		-		212,853		-
Private label mortgage-backed securities		41,073		-		41,073		-
State and political subdivisions		107,322		-		107,322		-
Mutual funds held in deferred compensation trust		2,740		2,740		-		-

(Dollars in thousands)
	Fair Value March 31, 2025		Fair Value December 31, 2024		Valuation Technique	Significant Unobservable Inputs	General Range of Significant Unobservable Input Values
Individually evaluated loans	$	1,984	$	1,646	Appraised value	Discounts to reflect current market conditions and ultimate collectability	0 - 50%
Other real estate	$	125	$	369	Appraised value	Discounts to reflect current market conditions and estimated costs to sell	0 - 25%

(Dollars in thousands)
			Fair Value Measurements at March 31, 2025
	Carrying Amount		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	102,520		102,520		-		-		102,520
Investment securities available for sale		374,350		-		374,350		-		374,350
Other investments		2,674		-		-		2,674		2,674
Mortgage loans held for sale		544		-		544		-		544
Loans, net		1,142,033		-		-		1,139,464		1,139,464
Mutual funds held in deferred
compensation trust		2,740		2,740		-		-		2,740

Liabilities:
Deposits	$	1,517,569		-		1,519,747		-		1,519,747
Junior subordinated debentures		15,464		-		15,464		-		15,464

(Dollars in thousands)
			Fair Value Measurements at December 31, 2024
	Carrying Amount		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	59,266		59,266		-		-		59,266
Investment securities available for sale		388,003		-		388,003		-		388,003
Other investments		2,728		-		-		2,728		2,728
Mortgage loans held for sale		1,367		-		1,367		-		1,367
Loans, net		1,128,409		-		-		1,123,864		1,123,864
Mutual funds held in deferred
compensation trust		2,726		2,726		-		-		2,726

Liabilities:
Deposits	$	1,484,731		-		1,487,475		-		1,487,475
Junior subordinated debentures		15,464		-		15,464		-		15,464

(Dollars in thousands)
	Banking
	Operations		CBRES		Other			Consolidated
As of and for the three months ended March 31, 2025
Interest income	$	19,963		-		7			19,970
Interest expense		5,785		-		241			6,026
Net interest income		14,178		-		(234	)		13,944
Provision for credit losses		268		-		-			268
Noninterest income		3,487		-		-			3,487
Appraisal management fee income		-		3,042		-			3,042
Salaries and employee benefits		6,466		220		102			6,788
Occupancy		2,018		10		-			2,028
Appraisal management fee expense		-		2,419		-			2,419
Noninterest expense		3,083		188		67			3,338
Income tax expense (benefit)		1,325		47		(85	)		1,287
Net income (loss)	$	4,505		158		(318	)		4,345
Total assets	$	1,687,711		4,545		729			1,692,985
As of and for the three months ended March 31, 2024
Interest income	$	19,801		-		9			19,810
Interest expense		6,222		-		284			6,506
Net interest income		13,579		-		(275	)		13,304
Provision for credit losses		91		-		-			91
Noninterest income		3,624		-		-			3,624
Appraisal management fee income		-		2,414		-			2,414
Salaries and employee benefits		6,683		196		101			6,980
Occupancy		2,110		1		-			2,111
Appraisal management fee expense		-		1,904		-			1,904
Noninterest expense		3,313		147		61			3,521
Income tax expense (benefit)		841		38		(92	)		787
Net income (loss)	$	4,165		128		(345	)		3,948
Total assets	$	1,647,611		3,847		504			1,651,962

	Three months ended								Three months ended
	March 31, 2025								March 31, 2024
(Dollars in thousands)	Average Balance			Interest		Yield / Rate			Average Balance			Interest		Yield / Rate
Interest-earning assets:

Loans receivable	$	1,142,331		$	16,016		5.69	%	$	1,092,658		$	15,138		5.57	%
Investments - taxable		302,060			2,863		3.84	%		310,014			3,008		3.90	%
Investments - nontaxable*		134,289			746		2.25	%		136,791			763		2.24	%
Due from banks		32,939			350		4.31	%		66,518			907		5.48	%

Total interest-earning assets		1,611,619			19,975		5.03	%		1,605,981			19,816		4.96	%

Non-interest earning assets:
Cash and due from banks		29,509								32,045
Allowance for credit losses		(9,987	)							(11,062	)
Other assets		20,195								20,838

Total assets	$	1,651,336							$	1,647,802

Interest-bearing liabilities:

Interest-bearing demand, MMDA & savings deposits	$	746,960		$	2,652		1.44	%	$	648,306		$	2,060		1.28	%
Time deposits		341,296			3,133		3.72	%		352,247			3,681		4.20	%
Junior subordinated debentures		15,464			241		6.32	%		15,464			284		7.39	%
Other		-			-		-			72,695			481		2.66	%

Total interest-bearing liabilities		1,103,720			6,026		2.21	%		1,088,712			6,506		2.40	%

Non-interest bearing liabilities and shareholders' equity:
Demand deposits		402,567								427,752
Other liabilities		14,696								13,814
Shareholders' equity		130,353								117,524

Total liabilities and shareholders' equity	$	1,651,336							$	1,647,802

Net interest spread				$	13,949		2.82	%				$	13,310		2.56	%

Net yield on interest-earning assets							3.51	%							3.33	%

Taxable equivalent adjustment
Investment securities				$	5							$	6

Net interest income				$	13,944							$	13,304

*Includes U.S. Government agency securities that are non-taxable for state income tax purposes of $8.6 million in 2025 and $10.9 million in 2024. Tax rates of 2.25% and 2.50% were used to calculate the tax equivalent yields on these securities in 2025 and 2024, respectively.

	Three months ended March 31, 2025 compared to three months ended March 31, 2024									Three months ended March 31, 2024 compared to three months ended March 31, 2023
(Dollars in thousands)	Changes in average volume			Changes in average rates			Total Increase (Decrease)			Changes in average volume			Changes in average rates			Total Increase (Decrease)
Interest income:
Loans: Net of unearned income	$	692			186			878			730			1,525			2,255
Investments - taxable		(76	)		(69	)		(145	)		(275	)		454			179
Investments - nontaxable		(14	)		(3	)		(17	)		(11	)		20			9
Due from banks		(407	)		(150	)		(557	)		433			91			524
Total interest income		195			(36	)		159			877			2,090			2,967

Interest expense:
Interest-bearing demand,
MMDA & savings deposits		332			260			592			(323	)		895			572
Time deposits		(107	)		(441	)		(548	)		1,727			1,438			3,165
Junior subordinated debentures		-			(43	)		(43	)		-			36			36
Other		(241	)		(240	)		(481	)		177			93			270
Total interest expense		(16	)		(464	)		(480	)		1,581			2,462			4,043
Net interest income	$	211			428			639			(704	)		(372	)		(1,076	)

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (3)

January 1 - 31, 2025		-	$	-		-	$	2,000,000

February 1 - 28, 2025		63	$	28.96		-	$	2,000,000

March 1 - 31, 2025		3,037	$	27.55		-	$	3,000,000

Total		3,100	$	27.58		-

	(1) The Company purchased 3,100 shares on the open market in the three months ended March 31, 2025 for its deferred compensation plan. All purchases were funded by participant contributions to the plan.

	(2) Reflects shares purchased under the Company's publicly announced stock repurchase program.

	(3) Reflects dollar value of balance available for repurchase at end of period under the Company's stock repurchase program. $2.0 million authorized in June 2024, expired February 28, 2025. $3.0 million authorized in March 2025, expires February 28, 2026.