8-K

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 Report (Date of earliest event reported): May 24, 2023

UWHARRIE CAPITAL CORP

(Exact name of Registrant as Specified in Its Charter)

Registrant’s Telephone Number, Including Area Code: 704-983-6181

N/A

(Former Name or Former Address, if Changed Since Last Report)

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 (see General Instructions A.2. below):

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On May 24, 2023, Uwharrie Capital Corp (the "Registrant") released a quarterly report to its shareholders that included a letter to the shareholders from President and CEO Roger L. Dick and unaudited financial information for the period ended March 31, 2023.

A copy of this report is attached hereto as Exhibit 99.1 and incorporated by reference herein.

This Current Report on Form 8-K (including information included or incorporated by reference herein) may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Registrant’s goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. These statements are based upon the current belief and expectations of the Registrant’s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Registrant’s control).

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

uwhr-ex991_6.htm

Exhibit 99.1

May 24, 2023

Dear Shareholder:

Our Company was formed 40 years ago on April 26, 1983, with the vision of creating a financial institution for the people, by the people.  We were focused on building and enriching local economies by retaining control of our local wealth; helping our neighbors obtain a quality of life that promotes values and inspires us to care for one another.  It was our desire that this effort would allow opportunities for our children and grandchildren to achieve financial security.  This is the founding purpose of your Company that still holds true today.

Community banks are very different from large, regional or national banks. Each has their own role in the marketplace; community banks are representative of the customers and businesses that they serve and focus largely on relationships and local community development.  Our loans and deposits come from the local families, businesses and institutions we serve.

Banking is about risk management (each loan we make has some probability of default, and all deposits can leave at any time), but prudent risk management is what creates successful banks.  Unfortunately, the banking industry is now being defined by the results of poor management of a few institutions. At Uwharrie Capital, we are careful, deliberate and experienced risk managers.  We regularly review, evaluate, and monitor the strength of our balance sheet and make necessary adjustments where they are needed.  We strive to operate legally, lawfully, ethically, and transparently in full compliance with all federal and state banking statutes and regulations that affect us.

Your Company has grown to $1.05 billion in total assets as of March 31, 2023, an increase of $72 million from the same period in 2022.  Deposit growth contributed to total asset growth.  Loan growth has been strong year-over-year at 13.7%, despite rising interest rates. Due to the strong deposit growth, we still have the funds to meet loan demand for our local consumers and businesses. Even with the growth in loans, the Company’s loan-to-deposit ratio is approximately 54%, allowing the Company to remain conservative in its approach to balance sheet risk management.

During the first quarter of 2023, Uwharrie Capital Corp adopted CECL (Current Expected Credit Losses: ASU 2016-13), a new required way to allocate a reserve for credit losses based on expected losses over the life of the loans. This adoption required the $1.9 million net reduction to retained earnings upon adoption to fund the reserve. In essence, there is now double the amount of reserve for credit losses set aside for potential problem assets, with no changes to the asset quality of the balance sheet.

Net income for the first three months of 2023 was $2.0 million, as compared to $801 thousand for the same three-month period in 2022.  This equates to $1.8 million in net income available to common shareholders, or $0.26 per share, compared to $662 thousand in net income available to common shareholders, or $0.09 per share, that we reported in 2022 for the same period.  The key driver of the improvement in earnings year-over-year is directly attributable to the increase in margins as a result of the drastically increasing rate environment along with growth in the volume of loans.

As we approach the warm, summer months, we are reminded of the gifts and joys that each day brings. We appreciate your loyalty to Uwharrie Capital Corp and your being a part of helping to build strong, sustainable Main Street economies.

Sincerely,

UWHARRIE CAPITAL CORP

This Report may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Company's goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook,” or similar expressions. These statements are based upon the current belief and expectations of the Company‘s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control).

All values are in US Dollars.