8-K
PEOPLES BANCORP OF NORTH CAROLINA INC (PEBK)
| UNITED STATES | |
|---|---|
| SECURITIES AND EXCHANGE COMMISSION | |
| Washington, D.C. 20549 | |
| FORM 8-K | |
| --- | |
| CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) | |
| OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| Date of<br>Report (Date of earliest event<br>reported): July<br>19, 2021 | |
| --- | |
| Peoples Bancorp of North<br>Carolina, Inc. | |
| --- | |
| (Exact<br>Name of Registrant as Specified in Its Charter) | |
| North<br>Carolina | |
| --- | |
| (State<br>or Other Jurisdiction of Incorporation) | |
| 000-27205 | 56-2132396 |
| --- | --- |
| (Commission<br>File No.) | (IRS<br>Employer Identification No.) |
| 518 West C Street, Newton,<br>North Carolina | 28658 |
| --- | --- |
| (Address<br>of Principal Executive Offices) | (Zip<br>Code) |
| (828)<br>464-5620 | |
| --- | |
| (Registrant’s<br>Telephone Number, Including Area Code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Peoples<br>Bancorp of North Carolina, Inc. | |
|---|---|
| INDEX | |
| Page | |
| Item<br>2.02 – Results of Operations and Financial<br>Condition | 3 |
| Item<br>9.01 – Financial Statements and Exhibits | 3 |
| Signatures | 4 |
| Exhibit<br>(99)(a) Press Release dated July 19, 2021 | 5 |
Item 2.02. Results of Operations and Financial Condition
On July 19, 2021, Peoples Bancorp of North Carolina, Inc. issued a press release announcing second quarter 2021 earnings results.
A copy of the press release is attached hereto as Exhibit (99)(a) and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
(99)(a) Press Release dated July 19, 2021
Disclosure about forward-looking statements
Statements made in this Form 8-K, 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 report 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 might cause such a difference include, but are not limited to, changes in interest rate environment, management’s business strategy, national, regional, and local market conditions and legislative and regulatory conditions.
The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Readers should also carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission.
| SIGNATURES | ||
|---|---|---|
| Pursuant<br>to the requirements of the Securities Exchange Act of 1934, the<br>registrant has duly caused this report to be signed on its behalf<br>by the undersigned hereunto duly authorized. | ||
| PEOPLES<br>BANCORP OF NORTH CAROLINA, INC. | ||
| --- | --- | --- |
| Date:<br>July 19, 2021 | By: | /s/<br>Jeffrey N. Hooper |
| Jeffrey N.<br>Hooper | ||
| Executive<br>Vice President and Chief Financial Officer |
pebk_ex991
Exhibit 99(a)
NEWS RELEASE
July 19, 2021
Contact:
Lance A. Sellers
President and Chief Executive Officer
Jeffrey N. Hooper
Executive Vice President and Chief Financial Officer
828-464-5620, Fax 828-465-6780
For Immediate Release
PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS
Peoples Bancorp of North Carolina, Inc. (NASDAQ: PEBK), the parent company of Peoples Bank, reported second quarter earnings results with highlights as follows:
Second quarter highlights:
●
Net earnings were $4.6 million or $0.82 basic net earnings per share and $0.80 diluted net earnings per share for the three months ended June 30, 2021, as compared to $2.6 million or $0.46 basic net earnings per share and $0.44 diluted net earnings per share for the same period one year ago.
●
The Bank originated 72 Small Business Administration (SBA) Paycheck Protection Program (PPP) loans, totaling $3.3 million, during the three months ended June 30, 2021. The Bank recognized $1.5 million in PPP loan fee income during the three months ended June 30, 2021.
Year to date highlights:
●
Net earnings were $8.7 million or $1.55 basic net earnings per share and $1.51 diluted net earnings per share for the six months ended June 30, 2021, as compared to $4.9 million or $0.87 basic net earnings per share and $0.84 diluted net earnings per share for the same period one year ago.
●
The Bank originated 419 SBA PPP loans, totaling $29.1 million, during the six months ended June 30, 2021. The Bank recognized $2.5 million in PPP loan fee income during the six months ended June 30, 2021.
●
Core deposits were $1.4 billion or 98.09% of total deposits at June 30, 2021, compared to $1.1 billion or 97.88% of total deposits at June 30, 2020.
Lance A. Sellers, President and Chief Executive Officer, attributed the increase in second quarter net earnings to an increase in net interest income, a decrease in the provision for loan losses and an increase in non-interest income, which were partially offset by an increase in non-interest expense during the three months ended June 30, 2021, compared to the three months ended June 30, 2020, as discussed below.
Net interest income was $11.7 million for the three months ended June 30, 2021, compared to $10.7 million for the three months ended June 30, 2020. The increase in net interest income was due to a $879,000 increase in interest income and a $70,000 decrease in interest expense. The increase in interest income was primarily due to a $823,000 increase in interest income and fees on loans, which was primarily due to a $1.5 million increase in fee income on SBA PPP loans. The decrease in interest expense was primarily due to a decrease in Federal Home Loan Bank (“FHLB”) borrowings. Net interest income after the provision for loan losses was $11.9 million for the three months ended June 30, 2021, compared to $9.3 million for the three months ended June 30, 2020. The provision for loan losses for the three months ended June 30, 2021 was a credit of $226,000, compared to an expense of $1.4 million for the three months ended June 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool. At June 30, 2021, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $283,000. At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. The Company continues to track all loans that are currently modified or have been modified as a result of the COVID-19 pandemic. The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Company’s Allowance for Loan and Lease Losses (“ALLL”) model as they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool. Of all loans modified as a result of the COVID-19 pandemic, $108.2 million have returned to their original terms; however, the effects of stimulus in the current environment are still unknown, and additional losses may be present in loans that are currently modified and/or loans that were once modified. At December 31, 2020, the balance for all loans that were then currently modified or previously modified but returned to their original terms was $119.6 million. The $11.4 million decrease from December 31, 2020 to June 30, 2021 in the balance of currently or previously modified loans that had returned to their original terms is primarily due to loans paid off during the six months ended June 30, 2021.
Non-interest income was $6.0 million for the three months ended June 30, 2021, compared to $5.2 million for the three months ended June 30, 2020. The increase in non-interest income is primarily attributable to a $593,000 increase in miscellaneous non-interest income primarily due to an increase in debit card income resulting from increased debit card activity and an increase in income on Small Business Investment Company (“SBIC”) investments, and a $271,000 increase in appraisal management fee income due to an increase in the volume of appraisals.
Non-interest expense was $12.1 million for the three months ended June 30, 2021, compared to $11.5 million for the three months ended June 30, 2020. The increase in non-interest expense was primarily attributable to a $301,000 increase in appraisal management fee expense due to an increase in the volume of appraisals and a $170,000 increase in other non-interest expenses.
Year-to-date net earnings as of June 30, 2021 were $8.7 million or $1.55 basic net earnings per share and $1.51 diluted net earnings per share for the six months ended June 30, 2021, as compared to $4.9 million or $0.87 basic net earnings per share and $0.84 diluted net earnings per share for the same period one year ago. The increase in year-to-date net earnings is primarily attributable to an increase in net interest income, a decrease in the provision for loan losses and an increase in non-interest income, which were partially offset by an increase in non-interest expense during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, as discussed below.
Year-to-date net interest income as of June 30, 2021 was $22.8 million, compared to $21.9 million for the same period one year ago. The increase in net interest income was due to a $551,000 increase in interest income and a $296,000 decrease in interest expense. The increase in interest income was primarily due to a $807,000 increase in interest income and fees on loans, which was primarily due to a $2.5 million increase in fee income on SBA PPP loans. The decrease in interest expense was primarily due to a decrease in rates paid on interest-bearing liabilities and a decrease in FHLB borrowings. Net interest income after the provision for loan losses was $23.5 million for the six months ended June 30, 2021, compared to $19.0 million for the same period one year ago. The provision for loan losses for the six months ended June 30, 2021 was a credit of $681,000, compared to an expense of $2.9 million for the six months ended June 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool.
Non-interest income was $11.9 million for the six months ended June 30, 2021, compared to $9.8 million for the six months ended June 30, 2020. The increase in non-interest income is primarily attributable to a $708,000 increase in mortgage banking income due to an increase in mortgage loan volume, a $737,000 increase in appraisal management fee income due to an increase in the volume of appraisals and a $1.0 million increase in miscellaneous non-interest income primarily due to an increase in debit card income resulting from increased debit card activity and an increase in income on SBIC investments.
Non-interest expense was $24.4 million for the six months ended June 30, 2021, compared to $22.9 million for the six months ended June 30, 2020. The increase in non-interest expense was primarily attributable to a $723,000 increase in appraisal management fee expense due to an increase in the volume of appraisals and a $590,000 increase in salaries and employee benefits expense primarily due to increases in insurance costs and incentive compensation.
Income tax expense was $1.2 million for the three months ended June 30, 2021, compared to $535,000 for the three months ended June 30, 2020. The effective tax rate was 20.55% for the three months ended June 30, 2021, compared to 17.28% for the three months ended June 30, 2020. Income tax expense was $2.2 million for the six months ended June 30, 2021, compared to $1.0 million for the six months ended June 30, 2020. The effective tax rate was 20.41% for the six months ended June 30, 2021, compared to 16.90% for the six months ended June 30, 2020.
Total assets were $1.6 billion as of June 30, 2021, compared to $1.4 billion at December 31, 2020. Available for sale securities were $367.5 million as of June 30, 2021, compared to $245.2 million as of December 31, 2020. Total loans were $888.4 million as of June 30, 2021, compared to $948.6 million as of December 31, 2020. The decrease in loans is primarily due to a $38.3 million decrease in PPP loans primarily due to PPP loans being forgiven by the SBA during the six months ended June 30, 2021 and a $33.7 million decrease in commercial loans due to loan payoffs during the six months ended June 30, 2021. The Company had $37.5 million and $75.8 million in PPP loans at June 30, 2021 and December 31, 2020, respectively.
Non-performing assets were $3.4 million or 0.21% of total assets at June 30, 2021, compared to $3.9 million or 0.27% of total assets at December 31, 2020. Non-performing assets include $3.3 million in commercial and residential mortgage loans and $67,000 in other loans at June 30, 2021, compared to $3.5 million in commercial and residential mortgage loans, $226,000 in other loans, and $128,000 in other real estate owned at December 31, 2020.
The allowance for loan losses at June 30, 2021 was $9.3 million or 1.05% of total loans, compared to $9.9 million or 1.04% of total loans at December 31, 2020. Management believes the current level of the allowance for loan losses is adequate; however, there is no assurance that additional adjustments to the allowance will not be required because of changes in economic conditions, regulatory requirements or other factors.
Deposits were $1.4 billion at June 30, 2021, compared to $1.2 billion at December 31, 2020. Core deposits, which include noninterest-bearing demand deposits, NOW, MMDA, savings and non-brokered certificates of deposit of denominations less than $250,000, were $1.4 billion at June 30, 2021, compared to $1.2 billion at December 31, 2020. Certificates of deposit in amounts of $250,000 or more totaled $26.6 million at June 30, 2021, compared to $25.8 million at December 31, 2020.
Securities sold under agreements to repurchase were $31.2 million at June 30, 2021, compared to $26.2 million at December 31, 2020. Junior subordinated debentures were $15.5 million at June 30, 2021 and December 31, 2020. Shareholders’ equity was $145.4 million, or 9.09% of total assets, at June 30, 2021, compared to $139.9 million, or 9.89% of total assets, at December 31, 2020.
Peoples Bank currently operates 17 banking offices entirely in North Carolina, with offices in Catawba, Alexander, Lincoln, Mecklenburg, Iredell and Wake Counties. The Bank also operates loan production offices in Lincoln, Mecklenburg and Rowan Counties. The Company’s common stock is publicly traded and is quoted on the Nasdaq Global Market under the symbol “PEBK.”
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 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 Peoples 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, 2020.
CONSOLIDATED BALANCE SHEETS
June 30, 2021, December 31, 2020 and June 30, 2020
(Dollars in thousands)
| June<br>30,<br><br><br>2021 | December<br>31,<br><br><br>2020 | June<br>30,<br><br><br>2020 | |
|---|---|---|---|
| (Unaudited) | (Audited) | (Unaudited) | |
| ASSETS: | |||
| Cash and due from<br>banks | $47,151 | $42,737 | $48,990 |
| Interest-bearing<br>deposits | 240,158 | 118,843 | 15,694 |
| Federal funds<br>sold | - | - | 124,955 |
| Cash and cash<br>equivalents | 287,309 | 161,580 | 189,639 |
| Investment<br>securities available for sale | 367,529 | 245,249 | 207,469 |
| Other<br>investments | 3,758 | 4,155 | 7,196 |
| Total<br>securities | 371,287 | 249,404 | 214,665 |
| Mortgage loans held<br>for sale | 5,501 | 9,139 | 10,594 |
| Loans | 888,360 | 948,639 | 966,543 |
| Less: Allowance for<br>loan losses | (9,287) | (9,908) | (9,433) |
| Net<br>loans | 879,073 | 938,731 | 957,110 |
| Premises and<br>equipment, net | 17,217 | 18,600 | 18,480 |
| Cash surrender<br>value of life insurance | 17,164 | 16,968 | 16,507 |
| Accrued interest<br>receivable and other assets | 22,022 | 21,753 | 19,994 |
| Total<br>assets | $1,599,573 | $1,416,175 | $1,426,989 |
| LIABILITIES<br>AND SHAREHOLDERS' EQUITY: | |||
| Deposits: | |||
| Noninterest-bearing<br>demand | $512,577 | $456,980 | $457,637 |
| Interest-bearing<br>demand, MMDA & savings | 775,009 | 657,834 | 594,948 |
| Time, $250,000 or<br>more | 26,631 | 25,771 | 24,477 |
| Other<br>time | 77,837 | 80,501 | 77,267 |
| Total<br>deposits | 1,392,054 | 1,221,086 | 1,154,329 |
| Securities sold<br>under agreements to repurchase | 31,249 | 26,201 | 31,747 |
| FHLB<br>borrowings | - | - | 70,000 |
| Junior subordinated<br>debentures | 15,464 | 15,464 | 15,464 |
| Accrued interest<br>payable and other liabilities | 15,432 | 13,525 | 18,408 |
| Total<br>liabilities | 1,454,199 | 1,276,276 | 1,289,948 |
| Shareholders'<br>equity: | |||
| Preferred stock, no<br>par value; authorized | |||
| 5,000,000 shares;<br>no shares issued and outstanding | - | - | - |
| Common stock, no<br>par value; authorized | |||
| 20,000,000 shares;<br>issued and outstanding | |||
| 5,789,166 shares at<br>6/30/21, | |||
| 5,787,504 shares at<br>12/31/20 and 6/30/20 | 56,910 | 56,871 | 56,871 |
| Common stock held<br>by deferred compensation trust, | |||
| at cost; 158,985<br>shares at 6/30/21, 155,469 shares | |||
| at 12/31/20 and<br>150,309 shares at 6/30/20 | (1,901) | (1,796) | (1,700) |
| Deferred<br>compensation | 1,901 | 1,796 | 1,700 |
| Retained<br>earnings | 84,504 | 77,628 | 72,942 |
| Accumulated other<br>comprehensive income | 3,960 | 5,400 | 7,228 |
| Total shareholders'<br>equity | 145,374 | 139,899 | 137,041 |
| Total liabilities<br>and shareholders' equity | $1,599,573 | $1,416,175 | $1,426,989 |
CONSOLIDATED STATEMENTS OF INCOME
For the three and six months ended June 30, 2021 and 2020
(Dollars in thousands, except per share amounts)
| Three<br>months ended | Six months<br>ended | |||
|---|---|---|---|---|
| June<br>30, | June<br>30, | |||
| 2021 | 2020 | 2021 | 2020 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| INTEREST<br>INCOME: | ||||
| Interest and fees<br>on loans | $11,003 | $10,180 | $21,667 | $20,860 |
| Interest on due<br>from banks | 48 | 41 | 83 | 84 |
| Interest on federal<br>funds sold | - | 22 | - | 145 |
| Interest on<br>investment securities: | ||||
| U.S. Government<br>sponsored enterprises | 682 | 651 | 1,220 | 1,336 |
| State and political<br>subdivisions | 758 | 684 | 1,397 | 1,325 |
| Other | 26 | 60 | 72 | 138 |
| Total interest<br>income | 12,517 | 11,638 | 24,439 | 23,888 |
| INTEREST<br>EXPENSE: | ||||
| Interest-bearing<br>demand, MMDA & savings deposits | 543 | 448 | 1,040 | 973 |
| Time<br>deposits | 191 | 224 | 403 | 501 |
| FHLB<br>borrowings | - | 102 | - | 166 |
| Junior subordinated<br>debentures | 71 | 90 | 142 | 220 |
| Other | 37 | 48 | 72 | 93 |
| Total interest<br>expense | 842 | 912 | 1,657 | 1,953 |
| NET<br>INTEREST INCOME | 11,675 | 10,726 | 22,782 | 21,935 |
| PROVISION<br>FOR (RECOVERY OF) LOAN LOSSES | (226) | 1,417 | (681) | 2,938 |
| NET<br>INTEREST INCOME AFTER | ||||
| PROVISION<br>FOR LOAN LOSSES | 11,901 | 9,309 | 23,463 | 18,997 |
| NON-INTEREST<br>INCOME: | ||||
| Service<br>charges | 910 | 718 | 1,836 | 1,826 |
| Other service<br>charges and fees | 171 | 162 | 383 | 355 |
| Mortgage banking<br>income | 723 | 563 | 1,593 | 885 |
| Insurance and<br>brokerage commissions | 238 | 205 | 498 | 447 |
| Appraisal<br>management fee income | 2,005 | 1,734 | 3,821 | 3,084 |
| Miscellaneous | 1,993 | 1,400 | 3,782 | 2,780 |
| Total non-interest<br>income | 6,040 | 5,239 | 11,913 | 9,834 |
| NON-INTEREST<br>EXPENSES: | ||||
| Salaries and<br>employee benefits | 5,666 | 5,535 | 11,849 | 11,259 |
| Occupancy | 1,939 | 1,861 | 3,892 | 3,782 |
| Appraisal<br>management fee expense | 1,634 | 1,333 | 3,090 | 2,367 |
| Other | 2,893 | 2,723 | 5,569 | 5,493 |
| Total non-interest<br>expense | 12,132 | 11,452 | 24,400 | 22,901 |
| EARNINGS BEFORE<br>INCOME TAXES | 5,809 | 3,096 | 10,976 | 5,930 |
| INCOME<br>TAXES | 1,194 | 535 | 2,240 | 1,002 |
| NET<br>EARNINGS | $4,615 | $2,561 | $8,736 | $4,928 |
| PER<br>SHARE AMOUNTS | ||||
| Basic net<br>earnings | $0.82 | $0.46 | $1.55 | $0.87 |
| Diluted net<br>earnings | $0.80 | $0.44 | $1.51 | $0.84 |
| Cash<br>dividends | $0.16 | $0.15 | $0.32 | $0.45 |
| Book<br>value | $25.82 | $24.82 | $25.82 | $24.82 |
FINANCIAL HIGHLIGHTS
For the three and six months ended June 30, 2021 and 2020, and the year ended December 31, 2020
(Dollars in thousands)
| Three<br>months ended | Six months<br>ended | Year<br>ended | |||
|---|---|---|---|---|---|
| June<br>30, | June<br>30, | December<br>31, | |||
| 2021 | 2020 | 2021 | 2020 | 2020 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |
| SELECTED<br>AVERAGE BALANCES: | |||||
| Available for sale<br>securities | $346,889 | $195,101 | $305,127 | $191,986 | $200,821 |
| Loans | 916,393 | 947,344 | 931,714 | 904,489 | 935,970 |
| Earning<br>assets | 1,477,256 | 1,258,583 | 1,425,990 | 1,181,237 | 1,271,764 |
| Assets | 1,563,570 | 1,360,408 | 1,510,789 | 1,278,673 | 1,365,642 |
| Deposits | 1,370,159 | 1,104,394 | 1,319,755 | 1,038,839 | 1,115,019 |
| Shareholders'<br>equity | 141,167 | 134,803 | 142,566 | 135,775 | 141,287 |
| SELECTED<br>KEY DATA: | |||||
| Net interest margin<br>(tax equivalent) | 3.20% | 3.48% | 3.26% | 3.79% | 3.52% |
| Return on average<br>assets | 1.18% | 0.76% | 1.17% | 0.78% | 0.83% |
| Return on average<br>shareholders' equity | 13.11% | 7.64% | 12.36% | 7.30% | 8.04% |
| Average<br>shareholders' equity to total average assets | 9.03% | 9.91% | 9.44% | 9.91% | 9.89% |
| ALLOWANCE<br>FOR LOAN LOSSES: | |||||
| Balance, beginning<br>of period | $9,532 | $8,112 | $9,908 | $6,680 | $6,680 |
| Provision for<br>(Recovery of) loan losses | (226) | 1,417 | (681) | 2,938 | 4,259 |
| Charge-offs | (151) | (168) | (236) | (378) | (1,414) |
| Recoveries | 132 | 72 | 296 | 193 | 383 |
| Balance, end of<br>period | $9,287 | $9,433 | $9,287 | $9,433 | $9,908 |
| June<br>30,<br><br><br>2021 | June<br>30,<br><br><br>2020 | December<br>31,<br><br><br>2020 | |||
| --- | --- | --- | --- | ||
| (Unaudited) | (Unaudited) | (Audited) | |||
| ASSET<br>QUALITY: | |||||
| Non-accrual<br>loans | $3,378 | $3,999 | $3,758 | ||
| 90 days past due<br>and still accruing | - | - | - | ||
| Other real estate<br>owned | - | - | 128 | ||
| Total<br>non-performing assets | $3,378 | $3,999 | $3,886 | ||
| Non-performing<br>assets to total assets | 0.21% | 0.28% | 0.27% | ||
| Loans modifications<br>related to COVID-19 | $283 | $120,569 | $18,246 | ||
| Allowance for loan<br>losses to non-performing assets | 274.93% | 235.88% | 254.97% | ||
| Allowance for loan<br>losses to total loans | 1.05% | 0.98% | 1.04% | ||
| Allowance for loan<br>losses to total loans, excluding PPP loans | 1.09% | 1.09% | 1.14% | ||
| LOAN<br>RISK GRADE ANALYSIS: | |||||
| --- | --- | --- | --- | ||
| Percentage<br>of loans by risk grade | |||||
| Risk Grade 1<br>(excellent quality) | 0.63% | 1.58% | 1.18% | ||
| Risk Grade 2 (high<br>quality) | 19.16% | 21.64% | 20.45% | ||
| Risk Grade 3 (good<br>quality) | 68.78% | 65.35% | 65.70% | ||
| Risk Grade 4<br>(management attention) | 8.68% | 9.39% | 9.75% | ||
| Risk Grade 5<br>(watch) | 1.97% | 1.26% | 2.20% | ||
| Risk Grade 6<br>(substandard) | 0.78% | 0.78% | 0.72% | ||
| Risk Grade 7<br>(doubtful) | 0.00% | 0.00% | 0.00% | ||
| Risk Grade 8<br>(loss) | 0.00% | 0.00% | 0.00% |
At June 30, 2021, including non-accrual loans, there were three relationships exceeding $1.0 million in the Watch risk grade (which totaled $8.3 million). There were no relationships exceeding $1.0 million in the Substandard risk grade.