Peoples Bancorp of North Carolina (PEBK) 10-K18 Mar 222021 FY Annual reportFinancial data

Company Profile

Cover

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Dec. 31, 2021	Feb. 28, 2022	Jun. 30, 2021
Cover [Abstract]
Entity Registrant Name	Peoples Bancorp of North Carolina, Inc.
Entity Central Index Key	0001093672
Document Type	10-K
Amendment Flag	false
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	No
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Dec. 31, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		5,663,030
Entity Public Float			$ 113,818,773
Document Annual Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Auditor Name	Elliott Davis, PLLC
Auditor Location	Raleigh, North Carolina
Entity File Number	000-27205
Entity Incorporation State Country Code	NC
Entity Tax Identification Number	56-2132396
Entity Address Address Line 1	518 West C Street
Entity Address City Or Town	Newton
Entity Address State Or Province	NC
Entity Address Postal Zip Code	28658
City Area Code	828
Local Phone Number	464-5620
Auditor Firm Id	149

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and due from banks, including reserve requirements of $0 at both 12/31/21 and 12/31/20	$ 44,711,000	$ 42,737,000
Interest-bearing deposits	232,788,000	118,843,000
Cash and cash equivalents	277,499,000	161,580,000
Investment securities available for sale	406,549,000	245,249,000
Other investments	3,668,000	4,155,000
Total securities	410,217,000	249,404,000
Mortgage loans held for sale	3,637,000	9,139,000
Loans	884,869,000	948,639,000
Less allowance for loan losses	(9,355,000)	(9,908,000)
Net loans	875,514,000	938,731,000
Premises and equipment, net	16,104,000	18,600,000
Cash surrender value of life insurance	17,365,000	16,968,000
Other real estate	0	128,000
Right of use lease asset	4,612,000	3,423,000
Accrued interest receivable and other assets	19,245,000	18,202,000
Total assets	1,624,193,000	1,416,175,000
Deposits:
Noninterest-bearing demand	514,319,000	456,980,000
Interest-bearing demand, MMDA & savings	797,179,000	657,834,000
Time, $250,000 or more	26,333,000	25,771,000
Other time	74,917,000	80,501,000
Total deposits	1,412,748,000	1,221,086,000
Securities sold under agreements to repurchase	37,094,000	26,201,000
Junior subordinated debentures	15,464,000	15,464,000
Lease liability	4,677,000	3,471,000
Accrued interest payable and other liabilities	11,841,000	10,054,000
Total liabilities	1,481,824,000	1,276,276,000
Shareholders' equity:
Preferred stock, no par value; authorized 5,000,000 shares; no shares issued and outstanding	0	0
Common stock, no par value; authorized 20,000,000 shares; issued and outstanding 5,661,569 shares at December 31, 2021 and 5,787,504 shares at December 31, 2020	53,305,000	56,871,000
Common stock held by deferred compensation trust, at cost; 162,193 shares at December 31, 2021 and 155,469 shares at December 31, 2020	1,992,000	1,796,000
Deferred compensation	1,992,000	1,796,000
Retained earnings	88,968,000	77,628,000
Accumulated other comprehensive income	96,000	5,400,000
Total shareholders' equity	142,369,000	139,899,000
Total liabilities and shareholders' equity	$ 1,624,193,000	$ 1,416,175,000

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and due from banks, reserve requirements	$ 0	$ 0
Shareholders' equity:
Preferred stock, stated value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	5,912,300	5,787,504
Common stock, shares outstanding (in shares)	5,912,300	5,787,504

Consolidated Statements of Earn

Consolidated Statements of Earnings - USD ($)	12 Months Ended
Consolidated Statements of Earnings - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Interest income:
Interest and fees on loans	$ 41,186,000	$ 42,314,000	$ 43,301,000
Interest on due from banks	258,000	127,000	213,000
Interest on federal funds sold	0	204,000	331,000
Interest on investment securities:
U.S. Government sponsored enterprises	2,478,000	2,361,000	2,670,000
States and political subdivisions	3,146,000	2,691,000	2,915,000
Other	111,000	261,000	171,000
Total interest income	47,179,000	47,958,000	49,601,000
Interest expense:
Demand deposits, MMDA & savings deposits	2,029,000	1,962,000	1,596,000
Time deposits	752,000	947,000	909,000
FHLB borrowings	0	357,000	205,000
Junior subordinated debentures	280,000	370,000	844,000
Other	144,000	200,000	203,000
Total interest expense	3,205,000	3,836,000	3,757,000
Net interest income	43,974,000	44,122,000	45,844,000
Provision for (recovery of) loan losses	(1,163,000)	4,259,000	863,000
Net interest income after provision for loan losses	45,137,000	39,863,000	44,981,000
Non-interest income:
Service charges	3,921,000	3,528,000	4,576,000
Other service charges and fees	803,000	742,000	714,000
Gain on sale of securities	0	2,639,000	226,000
Mortgage banking income	2,505,000	2,469,000	1,264,000
Insurance and brokerage commissions	1,035,000	897,000	877,000
Appraisal management fee income	8,890,000	6,754,000	4,484,000
Gain (loss) on sale of other assets	105,000	0	(239,000)
Gain (loss) on sales and write-downs of other real estate, net	21,000	(47,000)	(11,000)
Miscellaneous	7,639,000	5,932,000	5,848,000
Total non-interest income	24,919,000	22,914,000	17,739,000
Non-interest expense:
Salaries and employee benefits	24,506,000	23,538,000	23,238,000
Occupancy	7,858,000	7,933,000	7,364,000
Professional fees	1,826,000	1,580,000	1,490,000
Advertising	536,000	787,000	1,021,000
Debit card expense	1,000,000	1,012,000	890,000
FDIC insurance	415,000	263,000	119,000
Appraisal management fee expense	7,112,000	5,274,000	3,421,000
Other	7,874,000	8,544,000	7,974,000
Total non-interest expense	51,127,000	48,931,000	45,517,000
Earnings before income taxes	18,929,000	13,846,000	17,203,000
Income tax expense	3,796,000	2,489,000	3,136,000
Net earnings	$ 15,133,000	$ 11,357,000	$ 14,067,000
Basic net earnings per share	$ 2.71	$ 2.01	$ 2.43
Diluted net earnings per share	2.63	1.95	2.36
Cash dividends declared per share	$ 0.66	$ 0.75	$ 0.66

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($)	12 Months Ended
Consolidated Statements of Comprehensive Income - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Consolidated Statements of Comprehensive Income
Net earnings	$ 15,133,000	$ 11,357,000	$ 14,067,000
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale	6,886,000	4,919,000	3,677,000
Reclassification adjustment for gains on securities available for sale included in net earnings	0	(2,639,000)	(226,000)
Total other comprehensive income (loss), before income taxes	(6,886,000)	2,280,000	3,451,000
Income tax expense (benefit) related to other comprehensive income (loss):
Unrealized holding gain (losses) on securities available for sale	(1,582,000)	1,130,000	845,000
Reclassification adjustment for gains on included in net earnings	0	(606,000)	(52,000)
Total income tax expense (benefit) related to other comprehensive income (loss)	(1,582,000)	524,000	793,000
Total other comprehensive income (loss), net of tax	(5,304,000)	1,756,000	2,658,000
Total comprehensive income	$ 9,829,000	$ 13,113,000	$ 16,725,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net earnings	$ 15,133,000	$ 11,357,000	$ 14,067,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, amortization and accretion	5,569,000	4,183,000	3,964,000
Provision for (recovery of) loan losses	(1,163,000)	4,259,000	863,000
Deferred income taxes	(283,000)	(560,000)	164,000
Gain on sale of investment securities	0	(2,639,000)	(226,000)
Gain on sale of other real estate	(21,000)	0	(6,000)
Write-down of other real estate	0	47,000	17,000
(Gain) loss on sale and writedowns of premises and equipment	(105,000)	0	239,000
Restricted stock units expense	181,000	27,000	270,000
Proceeds from sales of loans held for sale	98,365,000	112,426,000	56,364,000
Origination of loans held for sale	(92,863,000)	(117,148,000)	(60,101,000)
Change in:
Cash surrender value of life insurance	(397,000)	(380,000)	(383,000)
Right of use lease asset	738,000	199,000	787,000
Other assets	(498,000)	(596,000)	724,000
Lease liability	(721,000)	(176,000)	(762,000)
Other liabilities	2,965,000	(1,837,000)	(2,784,000)
Net cash provided by operating activities	26,900,000	9,162,000	13,197,000
Cash flows from investing activities:
Purchases of investment securities available for sale	(209,306,000)	(127,893,000)	(54,212,000)
Proceeds from sales, calls and maturities of investment securities available for sale	9,540,000	62,408,000	40,561,000
Proceeds from paydowns of investment securities available for sale	28,536,000	19,169,000	14,489,000
Purchases of other investments	0	(45,000)	(45,000)
Proceeds from paydowns of other investment securities	201,000	176,000	176,000
Net change in FHLB stock	331,000	(55,000)	(1,000)
Net change in loans	64,380,000	(99,971,000)	(46,505,000)
Purchases of premises and equipment	(484,000)	(2,492,000)	(2,835,000)
Purchases of bank owned life insurance	0	(269,000)	0
Proceeds from sale of premises and equipment	515,000	0	149,000
Proceeds from sale of other real estate and repossessions	149,000	0	42,000
Net cash used by investing activities	(106,138,000)	(148,972,000)	(48,181,000)
Cash flows from financing activities:
Net change in deposits	191,662,000	254,569,000	89,304,000
Net change in securities sold under agreement to repurchase	10,893,000	1,980,000	(33,874,000)
Proceeds from FHLB borrowings	0	70,000,000	184,500,000
Repayments of FHLB borrowings	0	(70,000,000)	(184,500,000)
Proceeds from FRB borrowings	1,000	1,000	1,000
Repayments of FRB borrowings	1,000	1,000	1,000
Proceeds from Fed Funds Purchased	162,000	7,011,000	100,252,000
Repayments of Fed Funds Purchased	(162,000)	(7,011,000)	(100,252,000)
Repayments of Junior Subordinated Debentures	0	(155,000)	(5,000,000)
Common stock repurchased	3,605,000	2,999,000	2,490,000
Cash dividends paid on common stock	(3,793,000)	(4,392,000)	(3,939,000)
Net cash (used) provided by financing activities	195,157,000	249,003,000	44,001,000
Net change in cash and cash equivalents	115,919,000	109,193,000	9,017,000
Cash and cash equivalents at beginning of period	161,580,000	52,387,000	43,370,000
Cash and cash equivalents at end of period	277,499,000	161,580,000	52,387,000
Cash paid during the year for:
Interest	3,224,000	3,856,000	3,750,000
Income taxes	3,669,000	2,781,000	3,206,000
Noncash investing and financing activities:
Change in unrealized gain on investment securities available for sale, net	(5,304,000)	1,756,000	2,658,000
Transfer of loans to other real estate	2,999,000	175,000	26,000
Issuance of accrued restricted stock units	39,000	57,000	207,000
Recognition of lease right of use asset and lease liability	$ 1,927,000	$ 942,000	$ 4,401,000

Consolidated Statements of Chan

Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands	Total	Common Stock	Retained Earnings (Accumulated Deficit)	Deferred Compensation	Common Stock Held By Deferred Compensation Trust	Accumulated other comprehensive loss
Balance, shares at Dec. 31, 2018		5,995,256
Balance, amount at Dec. 31, 2018	$ 123,617,000	$ 62,096,000	$ 60,535,000	$ 1,374,000	$ (1,374,000)	$ 986,000
Common stock repurchase, shares		90,354
Common stock repurchase, amount	(2,490,000)	$ (2,490,000)	0	0	0	0
Cash dividends declared on common stock	(3,939,000)	$ 0	(3,939,000)	0	0	0
Restricted stock units exercised, shares		7,398
Restricted stock units exercised, amount	207,000	$ 207,000	0	0	0	0
Equity incentive plan, net	0	0	0	214,000	(214,000)	0
Net earnings	14,067,000	0	14,067,000	0	0	0
Change in accumulated other comprehensive income, net of tax	2,658,000	$ 0	0	0	0	2,658,000
Balance, shares at Dec. 31, 2019		5,912,300
Balance, amount at Dec. 31, 2019	134,120,000	$ 59,813,000	70,663,000	1,588,000	(1,588,000)	3,644,000
Common stock repurchase, shares		126,800
Common stock repurchase, amount	(2,999,000)	$ (2,999,000)	0	0	0	0
Cash dividends declared on common stock	(4,392,000)	$ 0	(4,392,000)	0	0	0
Restricted stock units exercised, shares		2,004
Restricted stock units exercised, amount	57,000	$ 57,000	0	0	0	0
Equity incentive plan, net	0	0	0	208,000	(208,000)	0
Net earnings	11,357,000	0	11,357,000	0	0	0
Change in accumulated other comprehensive income, net of tax	1,756,000	$ 0	0	0	0	1,756,000
Balance, shares at Dec. 31, 2020		5,787,504
Balance, amount at Dec. 31, 2020	139,899,000	$ 56,871,000	77,628,000	1,796,000	(1,796,000)	5,400,000
Common stock repurchase, shares		127,597
Common stock repurchase, amount	(3,605,000)	$ (3,605,000)	0	0	0	0
Cash dividends declared on common stock	(3,793,000)	$ 0	(3,793,000)			0
Restricted stock units exercised, shares		1,662
Restricted stock units exercised, amount	39,000	$ 39,000	0	0	0	0
Equity incentive plan, net	0	0	0	196,000	(196,000)	0
Net earnings	15,133,000	0	15,133,000	0	0	0
Change in accumulated other comprehensive income, net of tax	(5,304,000)	$ 0	0	0	0	(5,304,000)
Balance, shares at Dec. 31, 2021		5,661,569
Balance, amount at Dec. 31, 2021	$ 142,369,000	$ 53,305,000	$ 88,968,000	$ 1,992,000	$ (1,992,000)	$ 96,000

1. Summary of Significant Accou

1. Summary of Significant Accounting Policies	12 Months Ended
1. Summary of Significant Accounting Policies	Dec. 31, 2021
1. Summary of Significant Accounting Policies
1. Summary of Significant Accounting Policies	(1) Summary of Significant Accounting Policies Organization Peoples Bancorp of North Carolina, Inc. (“Bancorp” or the “Company”) has served as the holding company to Peoples Bank (the “Bank”) since 1999. Bancorp is primarily regulated by the Board of Governors of the Federal Reserve System, and serves as the one-bank holding company for the Bank. The Bank commenced business in 1912 upon receipt of its banking charter from the North Carolina Commissioner of Banks (the “Commissioner”). The Bank is primarily regulated by the Commissioner and the Federal Deposit Insurance Corporation (the “FDIC”) and undergoes periodic examinations by these regulatory agencies. The Bank, whose main office is in Newton, North Carolina, provides a full range of commercial and consumer banking services primarily in Catawba, Alexander, Lincoln, Mecklenburg, Iredell and Wake counties in North Carolina. Peoples Investment Services, Inc. (“PIS”) is a wholly owned subsidiary of the Bank and began operations in 1996 to provide investment and trust services through agreements with an outside party. Real Estate Advisory Services, Inc. (“REAS”) is a wholly owned subsidiary of the Bank and began operations in 1997 to provide real estate appraisal and property management services to individuals and commercial customers of the Bank. Community Bank Real Estate Solutions, LLC (“CBRES”) is a wholly owned subsidiary of the Bank and began operations in 2009 as a “clearing house” for appraisal services for community banks. Other banks are able to contract with CBRES to find and engage appropriate appraisal companies. In 2019, the Company launched PB Insurance Agency, which is part of CBRES. PB Real Estate Holdings, LLC (“PBREH”) is a wholly owned subsidiary of the Bank and began operation in 2015. PBREH acquires, manages and disposes of real property, other collateral and other assets obtained in the ordinary course of collecting debts previously contracted. The Bank operates three banking offices focused on the Latino population that were formerly operated as a division of the Bank under the name Banco de la Gente (“Banco”). These offices, which offer the same banking services as our other branches offer, now operate under the same name as our other offices; however, we continue to separately categorize mortgage loans originated from these offices. Principles of Consolidation The consolidated financial statements include the financial statements of Bancorp and its wholly owned subsidiary, the Bank, along with the Bank’s wholly owned subsidiaries, PIS, REAS, CBRES and PBREH. All significant intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation The accounting principles followed by the Company, and the methods of applying these principles, conform with accounting principles generally accepted in the United States of America (“GAAP”) and with general practices in the banking industry. In preparing the financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ significantly from these estimates. Material estimates common to the banking industry that are particularly susceptible to significant change in the near term include, but are not limited to, the determination of the allowance for loan losses and valuation of real estate acquired in connection with or in lieu of foreclosure on loans. Correction of an Error Subsequent to issuance of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets. The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability. A-36 For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments. This resulted in an increase to these line items of $1.3 million. Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020. On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $1.95 to $2.01 for the year ended December 31, 2020 and from $2.37 to $2.43 for the year ended December 31, 2019. The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements. These changes to basic earnings per share are also reflected within Note 1 to the financial statements below. In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares. The Company’s Consolidated Statements of Cash Flows were adjusted for the years ended December 31, 2020 and 2019 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets. The adjustments to correct the error noted above were not considered material to the financial statements. Cash and Cash Equivalents Cash, due from banks, interest-bearing deposits and federal funds sold are considered cash and cash equivalents for cash flow reporting purposes. Investment Securities The Company uses three classifications for its investment securities: trading, available for sale, or held to maturity. Trading securities are bought and held principally for sale in the near term. Held to maturity securities are those securities for which the Company has the ability and intent to hold until maturity. All other securities not included in trading or held to maturity are classified as available for sale. At December 31, 2021 and 2020, the Company classified all of its investment securities as available for sale. Available for sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, are excluded from earnings and are reported as a separate component of shareholders’ equity until realized. Management evaluates investment securities for other-than-temporary impairment on a quarterly basis. A decline in the market value of any investment below cost that is deemed other-than-temporary is charged to earnings for the decline in value deemed to be credit related and a new cost basis in the security is established. The decline in value attributed to non-credit related factors is recognized in comprehensive income. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to the yield. Realized gains and losses for securities classified as available for sale are included in earnings and are derived using the specific identification method for determining the cost of securities sold. Other Investments Other investments include equity securities with no readily determinable fair value. These investments are carried at cost. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity are reported at the principal amount outstanding, net of the allowance for loan losses. Interest on loans is calculated by using the simple interest method on daily balances of the principal amount outstanding. The recognition of certain loan origination fee income and certain loan origination costs is deferred when such loans are originated and amortized over the life of the loan. A-37 A loan is impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan will not be collected. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, or at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Accrual of interest is discontinued on a loan when management believes, after considering economic conditions and collection efforts, that the borrower’s financial condition is such that collection of interest is doubtful. Interest previously accrued but not collected is reversed against current period earnings. Allowance for Loan Losses The allowance for loan losses (“ALLL” or “allowance”) reflects management’s assessment and estimate of the risks associated with extending credit and its evaluation of the quality of the loan portfolio. The Bank periodically analyzes the loan portfolio in an effort to review asset quality and to establish an allowance that management believes will be adequate in light of anticipated risks and loan losses. In assessing the adequacy of the allowance, size, quality and risk of loans in the portfolio are reviewed. Other factors considered are: · the Bank’s loan loss experience; · the amount of past due and non-performing loans; · specific known risks; · the status and amount of other past due and non-performing assets; · underlying estimated values of collateral securing loans; · current and anticipated economic conditions; and · other factors which management believes affect the allowance for potential credit losses. Management uses several measures to assess and monitor the credit risks in the loan portfolio, including a loan grading system that begins upon loan origination and continues until the loan is collected or collectability becomes doubtful. Upon loan origination, the Bank’s originating loan officer evaluates the quality of the loan and assigns one of eight risk grades. The loan officer monitors the loan’s performance and credit quality and makes changes to the credit grade as conditions warrant. When originated or renewed, all loans over a certain dollar amount receive in-depth reviews and risk assessments by the Bank’s Credit Administration. Before making any changes in these risk grades, management considers assessments as determined by the third party credit review firm (as described below), regulatory examiners and the Bank’s Credit Administration. Any issues regarding the risk assessments are addressed by the Bank’s senior credit administrators and factored into management’s decision to originate or renew the loan. The Bank’s Board of Directors reviews, on a monthly basis, an analysis of the Bank’s reserves relative to the range of reserves estimated by the Bank’s Credit Administration. As an additional measure, the Bank engages an independent third party to review the underwriting, documentation and risk grading analyses. This independent third party reviews and evaluates loan relationships greater than or equal to $1.5 million as well as a periodic sample of commercial relationships with exposures below $1.5 million, excluding loans in default, and loans in process of litigation or liquidation. The third party’s evaluation and report is shared with management and the Board of Directors of the Bank (“Bank Board”). Management considers certain commercial loans with weak credit risk grades to be individually impaired and measures such impairment based upon available cash flows and the value of the collateral. Allowance or reserve levels are estimated for all other graded loans in the portfolio based on their assigned credit risk grade, type of loan and other matters related to credit risk. Management uses the information developed from the procedures described above in evaluating and grading the loan portfolio. This continual grading process is used to monitor the credit quality of the loan portfolio and to assist management in estimating the allowance. The provision for loan losses charged or credited to earnings is based upon management’s judgment of the amount necessary to maintain the allowance at a level appropriate to absorb probable incurred losses in the loan portfolio at the balance sheet date. The amount each quarter is dependent upon many factors, including growth and changes in the composition of the loan portfolio, net charge-offs, delinquencies, management’s assessment of loan portfolio quality, the value of collateral, and other macro-economic factors and trends. The evaluation of these factors is performed quarterly by management through an analysis of the appropriateness of the allowance. A-38 The allowance is comprised of three components: specific reserves, general reserves and unallocated reserves. After a loan has been identified as impaired, management measures impairment. When the measure of the impaired loan is less than the recorded investment in the loan, the amount of the impairment is recorded as a specific reserve. These specific reserves are determined on an individual loan basis based on management’s current evaluation of the Bank’s loss exposure for each credit, given the appraised value of any underlying collateral. Loans for which specific reserves are provided are excluded from the general allowance calculations as described below. The general allowance reflects reserves established under GAAP for collective loan impairment. These reserves are based upon historical net charge-offs using the greater of the last two, three, four, or five years’ loss experience. This charge-off experience may be adjusted to reflect the effects of current conditions. The Bank considers information derived from its loan risk ratings and external data related to industry and general economic trends in establishing reserves. Qualitative factors applied in the Bank’s ALLL model include the impact to the economy from the COVID-19 pandemic and reserves on loans with payment modifications as a result of the COVID-19 pandemic. At December 31, 2021, there were no loans with existing modifications as a result of the COVID-19 pandemic. At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. At December 31, 2021, the Bank continues to maintain a pool of loans that were previously modified as a result of the COVID-19 pandemic. The loan balances associated with those loans that were previously modified as a result of the COVID-19 pandemic related modifications have been grouped into their own pool within the Bank’s ALLL model as management considers that they have a higher risk profile, and a higher reserve rate has been applied to this pool. As such, a higher reserve rate has been applied to this pool. Loans included in this pool totaled $88.7 million and $119.6 million at December 31, 2021 and December 31, 2020, respectively. The unallocated allowance is determined through management’s assessment of probable losses that are in the portfolio but are not adequately captured by the other two components of the allowance, including consideration of current economic and business conditions and regulatory requirements. The unallocated allowance also reflects management’s acknowledgement of the imprecision and subjectivity that underlie the modeling of credit risk. Due to the subjectivity involved in determining the overall allowance, including the unallocated portion, the unallocated portion may fluctuate from period to period based on management’s evaluation of the factors affecting the assumptions used in calculating the allowance. There were no significant changes in the estimation methods or fundamental assumptions used in the evaluation of the allowance for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Revisions, estimates and assumptions may be made in any period in which the supporting factors indicate that loss levels may vary from the previous estimates. Effective December 31, 2012, certain mortgage loans from the former Banco division of the Bank were analyzed separately from other single family residential loans in the Bank’s loan portfolio. These loans are first mortgage loans made to the Latino market, primarily in Mecklenburg, North Carolina and surrounding counties. These loans are non-traditional mortgages in that the customer normally did not have a credit history, so all credit information was accumulated by the loan officers. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans are excluded from the allowance as PPP loans are 100 percent guaranteed by the SBA. Various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance. Such agencies may require adjustments to the allowance based on their judgments of information available to them at the time of their examinations. Management believes it has established the allowance for credit losses pursuant to GAAP, and has taken into account the views of its regulators and the current economic environment. Management considers the allowance adequate to cover the estimated losses inherent in the Bank’s loan portfolio as of the date of the financial statements. Although management uses the best information available to make evaluations, significant future additions to the allowance may be necessary based on changes in economic and other conditions, thus adversely affecting the operating results of the Company. Mortgage Banking Activities Mortgage banking income represents income from the sale of mortgage loans and fees received from borrowers and loan investors related to the Bank’s origination of single-family residential mortgage loans. Mortgage loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balances of mortgage loans serviced for others was approximately $351,000, $578,000 and $729,000 at December 31, 2021, 2020 and 2019, respectively. Mortgage servicing rights related to these loans are immaterial for all periods presented. The Bank originates certain fixed rate mortgage loans and commits these loans for sale. The commitments to originate fixed rate mortgage loans and the commitments to sell these loans to a third party are both derivative contracts. The fair value of these derivative contracts is immaterial and has no effect on the recorded amounts in the financial statements. A-39 Mortgage loans held for sale are carried at the lower of aggregate cost or market value. The cost of mortgage loans held for sale approximates the market value. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is reflected in earnings for that period. The cost of maintenance and repairs that do not improve or extend the useful life of the respective asset is charged to earnings as incurred, whereas significant renewals and improvements are capitalized. The range of estimated useful lives for premises and equipment are generally as follows: Buildings and improvements 10- 50 years Furniture and equipment 3 - 10 years Other Real Estate Foreclosed assets include all assets received in full or partial satisfaction of a loan. Foreclosed assets are reported at fair value less estimated selling costs. Any write-downs at the time of foreclosure are charged to the allowance. Subsequent to foreclosure, valuations are periodically performed by management, and a valuation allowance is established if fair value less estimated selling costs declines below carrying value. Costs relating to the development and improvement of the property are capitalized. Revenues and expenses from operations are included in other expenses. Changes in the valuation allowance are included in loss on sale and write-down of other real estate. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Additionally, the recognition of future tax benefits, such as net operating loss carryforwards, is required to the extent that the realization of such benefits is more likely than not to occur. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities results in a deferred tax asset, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some portion or all of the deferred tax asset will not be realized. In assessing the realizability of a deferred tax asset, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. Tax effects from an uncertain tax position can be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Previously recognized tax positions that no longer meet the more likely than not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company assessed the impact of this guidance and determined that it did not have a material impact on the Company’s financial position, results of operations or disclosures. Advertising Costs Advertising costs are expensed as incurred. Stock-Based Compensation The Company has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2009 (the “2009 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. The 2009 Plan expired on May 7, 2019 but still governs the rights and obligations of the parties for grants made thereunder. No new awards may be made after May 7, 2019. The Company granted 16,583 restricted stock units under the 2009 Plan at a grant date fair value of $16.34 per share during the first quarter of 2015. The Company granted 5,544 restricted stock units under the 2009 Plan at a grant date fair value of $16.91 per share during the first quarter of 2016. The Company granted 4,114 A-40 restricted stock units under the 2009 Plan at a grant date fair value of $25.00 per share during the first quarter of 2017. The Company granted 3,725 restricted stock units under the 2009 Plan at a grant date fair value of $31.43 per share during the first quarter of 2018. The Company granted 5,290 restricted stock units under the 2009 Plan at a grant date fair value of $28.43 per share during the first quarter of 2019. The number of restricted stock units granted and grant date fair values for the restricted stock units granted in 2015 through 2017 have been restated to reflect the 10% stock dividend that was paid in the fourth quarter of 2017. The Company recognizes compensation expense on the restricted stock units over the vesting period (four years from the grant date for the 2015, 2016, 2017, 2018 and 2019 grants). The amount of expense recorded each period reflects the changes in the Company’s stock price during such period. As of December 31, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2009 Plan was $38,000. The Company also has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2020 (the “2020 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. A total of 300,000 shares were reserved for possible issuance under the 2020 Plan when it was adopted. As of December 31, 2021, a total of 285,305 shares out of the initial 300,000 shares reserved remain available for future issuance under the 2020 Plan. No new awards may be made after May 7, 2030 (ten years from the 2020 Plan effective date). The Company granted 7,635 restricted stock units under the 2020 Plan at a grant date fair value of $17.08 per share during the second quarter of 2020. The Company granted 7,060 restricted stock units under the 2020 Plan at a grant date fair value of $22.04 per share during the first quarter of 2021. The Company recognizes compensation expense on the restricted stock units over the vesting period (four years from the grant date for 2020 and 2021 grants). As of December 31, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2020 Plan was $273,000. The Company recognized compensation expense for restricted stock units granted under the 2009 Plan and 2020 Plan of $181,000 and $27,000 for the years ended December 31, 2021 and 2020, respectively. The Company recognized compensation expense for restricted stock units granted under the 2009 Plan of $270,000 for the year ended December 31, 2019. Net Earnings Per Share Net earnings per common share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per common share. The average market price during the year is used to compute equivalent shares. The reconciliations of the amounts used in the computation of both “basic earnings per common share” and “diluted earnings per common share” for the years ended December 31, 2021, 2020 and 2019 are as follows: For the year ended December 31, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 15,133 5,576,099 $ 2.71 Effect of dilutive securities: Restricted stock units - unvested - 13,935 Shares held in deferred comp plan 158,831 Diluted earnings per share $ 15,133 5,748,865 $ 2.63 For the year ended December 31, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 11,357 5,657,025 $ 2.01 Effect of dilutive securities: Restricted stock units - unvested - 14,203 Shares held in deferred comp plan - 150,394 Diluted earnings per share $ 11,357 5,821,622 $ 1.95 A-41 For the year ended December 31, 2019 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 14,067 5,799,505 $ 2.43 Effect of dilutive securities: Restricted stock units - unvested - 25,438 Shares held in deferred comp plan - 141,542 Diluted earnings per share $ 14,067 5,966,485 $ 2.36 Revenue Recognition The Company has applied ASU 2014-09 using a modified retrospective approach. The Company’s revenue is comprised of net interest income and noninterest income. The scope of ASU 2014-09 explicitly excludes net interest income as well as many other revenues for financial assets and liabilities including loans, leases, securities, and derivatives. Accordingly, the majority of the Company’s revenues are not affected. Appraisal management fee income and expense from the Bank’s subsidiary, CBRES, was reported as a net amount prior to March 31, 2018, which was included in miscellaneous non-interest income. This income and expense is now reported on separate line items under non-interest income and non-interest expense. See below for additional information related to revenue generated from contracts with customers. Revenue and Method of Adoption The majority of the Company’s revenue is derived primarily from interest income from receivables (loans) and securities. Other revenues are derived from fees received in connection with deposit accounts, investment advisory, and appraisal services. On January 1, 2018, the Company adopted the requirements of ASU 2014-09. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU 2014-09 using the modified retrospective transition approach which does not require restatement of prior periods. The method was selected as there were no material changes in the timing of revenue recognition resulting in no comparability issues with prior periods. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature of, and reason for, the change, which is solely a result of the adoption of the required standard. When applying the modified retrospective approach under ASU 2014-09, the Company has elected, as a practical expedient, to apply this approach only to contracts that were not completed as of January 1, 2018. A completed contract is considered to be a contract for which all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before January 1, 2018. There were no uncompleted contracts as of January 1, 2018 for which application of the new standard required an adjustment to retained earnings. The following disclosures involve the Company’s material income streams derived from contracts with customers which are within the scope of ASU 2014-09. Through the Company’s wholly-owned subsidiary, PIS, the Company contracts with a registered investment advisor to perform investment advisory services on behalf of the Company’s customers. The Company receives commissions from this third party investment advisor based on the volume of business that the Company’s customers do with such investment advisor. Total revenue recognized from these contracts was $1.0 million, $896,000 and $876,000 for the years ended December 31, 2021, 2020 and 2019, respectively. The Company utilizes third parties to contract with the Company’s customers to perform debit and credit card clearing services. These third parties pay the Company commissions based on the volume of transactions that they process on behalf of the Company’s customers. Total revenue recognized from these contracts with these third parties was $5.0 million, $4.2 million and $4.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Through the Company’s wholly-owned subsidiary, REAS, the Company provides property appraisal services for negotiated fee amounts on a per appraisal basis. Total revenue recognized from these contracts with customers was $854,000, $828,000 and $692,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Through the Company’s wholly-owned subsidiary, CBRES, the Company provides appraisal management services. Total revenue recognized from these contracts with customers was $8.9 million, $6.8 million and $4.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Due to the nature of the Company’s relationship with its customers, the Company does not incur costs to obtain contracts and there are no material incremental costs to fulfill these contracts that should be capitalized. Disaggregation of Revenue A-42 transf

2. Investment Securities

2. Investment Securities	12 Months Ended
2. Investment Securities	Dec. 31, 2021
2. Investment Securities
Investment Securities	(2) Investment Securities Investment securities available for sale at December 31, 2021 and 2020 are as follows: (Dollars in thousands) December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mortgage-backed securities $ 143,095 2,812 593 145,314 U.S. Government sponsored enterprises 7,384 331 208 7,507 State and political subdivisions 87,757 4,758 87 92,428 Total $ 238,236 7,901 888 245,249 The current fair value and associated unrealized losses on investments in debt securities with unrealized losses at December 31, 2021 and 2020 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position. (Dollars in thousands) December 31, 2021 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasuries $ 7,889 75 - - 7,889 75 U.S. Government sponsored enterprises 5,232 15 3,263 170 8,495 185 Mortgage-backed securities 131,483 2,477 19,632 542 151,115 3,019 State and political subdivisions 80,076 1,981 5,922 276 85,998 2,257 Total $ 224,680 4,548 28,817 988 253,497 5,536 (Dollars in thousands) December 31, 2020 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 80,827 565 4,762 28 85,589 593 U.S. Government sponsored enterprises - - 4,193 208 4,193 208 State and political subdivisions 7,126 87 - - 7,126 87 Total $ 87,953 652 8,955 236 96,908 888 At December 31, 2021, unrealized losses in the investment securities portfolio relating to debt securities totaled $5.5 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the December 31, 2021 tables above, both of the U.S. Treasury securities, 70 of the 146 securities issued by state and political subdivisions contained unrealized losses and 54 of the 99 securities issued by U.S. Government sponsored enterprises, including mortgage-backed securities, contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations on each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed. The Company periodically evaluates its investments for any impairment which would be deemed other-than-temporary. No investment impairments were deemed other-than-temporary in 2021, 2020 or 2019. The amortized cost and estimated fair value of investment securities available for sale at December 31, 2021, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. December 31, 2021 (Dollars in thousands) Amortized Cost Fair Value Due within one year $ 8,051 8,081 Due from one to five years 11,759 12,274 Due from five to ten years 127,903 129,832 Due after ten years 40,307 39,210 Mortgage-backed securities 218,402 217,152 Total $ 406,422 406,549 During 2021, no securities available for sale were sold. During 2020, proceeds from sales of securities available for sale were $56.3 million and resulted in gross gains of $2.7 million and gross losses of $56,000. During 2019, proceeds from sales of securities available for sale were $20.7 million and resulted in gross gains of $230,000 and gross losses of $4,000. Securities with a fair value of approximately $98.6 million and $77.3 million at December 31, 2021 and 2020, respectively, were pledged to secure public deposits, FHLB borrowings and for other purposes as required by law. GAAP establishes a framework for measuring fair value and expands disclosures about fair value measurements. There is a three-level fair value hierarchy for fair value measurements. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The table below presents the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2021 and 2020. (Dollars in thousands) December 31, 2021 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation U. S Treasuries $ 7,889 - 7,889 - U.S. Government sponsored enterprises $ 14,267 - 14,267 - Mortgage-backed securities $ 217,152 - 217,152 - State and political subdivisions $ 167,241 - 167,241 - (Dollars in thousands) December 31, 2020 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage-backed securities $ 145,314 - 145,314 - U.S. Government sponsored enterprises $ 7,507 - 7,507 - State and political subdivisions $ 92,428 - 92,428 - Fair values of investment securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges when available. If quoted prices are not available, fair value is determined using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

3. Loans

3. Loans	12 Months Ended
3. Loans	Dec. 31, 2021
3. Loans
Loans	(3) Loans Major classifications of loans at December 31, 2021 and 2020 are summarized as follows: (Dollars in thousands) December 31, 2021 December 31, 2020 Real estate loans: Construction and land development $ 95,760 94,124 Single-family residential 266,111 272,325 Single-family residential - Banco de la Gente non-traditional 23,147 26,883 Commercial 337,841 332,971 Multifamily and farmland 58,366 48,880 Total real estate loans 781,225 775,183 Loans not secured by real estate: Commercial loans 91,172 161,740 Farm loans 796 855 Consumer loans 6,436 7,113 All other loans 5,240 3,748 Total loans 884,869 948,639 Less allowance for loan losses (9,355 ) (9,908 ) Total net loans $ 875,514 938,731 The above table includes deferred costs, net of deferred fees, totaling $198,000 at December 31, 2021 including $945,000 in deferred PPP loan fees. The above table includes deferred fees, net of deferred costs, totaling $1.4 million at December 31, 2020 including $2.6 million in deferred PPP loan fees. The Bank makes loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties and also in Mecklenburg, Wake, Rowan and Forsyth counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial A-48 portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below: · 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. As of December 31, 2021, construction and land development loans comprised approximately 11% of the Bank’s total loan portfolio. · 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. As of December 31, 2021, single-family residential loans comprised approximately 33% of the Bank’s total loan portfolio, including Banco single-family residential non-traditional loans which were approximately 3% of the Bank’s total loan portfolio. · 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. As of December 31, 2021, commercial real estate loans comprised approximately 38% of the Bank’s total loan portfolio. · 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. As of December 31, 2021, commercial loans comprised approximately 10% of the Bank’s total loan portfolio, including $18.0 million in PPP loans. · Multifamily and farmland loans – Decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans. As of December 31, 2021, construction and land development loans comprised approximately 7% of the Bank’s total loan portfolio. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. On March 27, 2020, President Trump signed the CARES Act, which established a $2 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the PPP. Under the PPP, small businesses, sole proprietorships, independent contractors and self-employed individuals were able to apply for loans from existing SBA lenders and other approved regulated lenders, subject to certain limitations and eligibility criteria. A second round of PPP funding, provided $320 billion additional funding for the PPP. The Bank participated as a lender in the PPP. Total PPP loans originated as of December 31, 2021 amounted to $128.1 million. The outstanding balance of PPP loans was $18.0 million and $75.8 million at December 31, 2021 and December 31, 2020, respectively. Through December 31, 2021, the Bank has received $5.7 million in fees from the SBA for PPP loans originated.. The Bank recognized $3.4 million and $1.4 million of PPP loan fee income for the years ended December 31, 2021 and 2020 respectively. The following tables present an age analysis of past due loans, by loan type, as of December 31, 2021 and 2020: A-49 December 31, 2021 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ - - - 95,760 95,760 - Single-family residential 2,323 634 2,957 263,154 266,111 - Single-family residential - Banco de la Gente non-traditional 2,593 112 2,705 20,442 23,147 - Commercial 488 - 488 337,353 337,841 - Multifamily and farmland - - - 58,366 58,366 - Total real estate loans 5,404 746 6,150 775,075 781,225 - Loans not secured by real estate: Commercial loans 43 - 43 91,129 91,172 - Farm loans - - - 796 796 - Consumer loans 38 - 38 6,398 6,436 - All other loans - - - 5,240 5,240 - Total loans $ 5,485 746 6,231 878,638 884,869 - December 31, 2020 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 298 - 298 93,826 94,124 - Single-family residential 3,660 270 3,930 268,395 272,325 - Single-family residential - Banco de la Gente non-traditional 3,566 105 3,671 23,212 26,883 - Commercial 36 - 36 332,935 332,971 - Multifamily and farmland - - - 48,880 48,880 - Total real estate loans 7,560 375 7,935 767,248 775,183 - Loans not secured by real estate: Commercial loans - - - 161,740 161,740 - Farm loans - - - 855 855 - Consumer loans 45 2 47 7,066 7,113 - All other loans - - - 3,748 3,748 - Total loans $ 7,605 377 7,982 940,657 948,639 - The following table presents the Bank’s non-accrual loans as of December 31, 2021 and 2020: A-50 (Dollars in thousands) December 31, 2021 December 31, 2020 Real estate loans: Construction and land development $ - - Single-family residential 1,642 1,266 Single-family residential - Banco de la Gente non-traditional 1,232 1,709 Commercial 200 440 Multifamily and farmland 105 117 Total real estate loans 3,179 3,532 Loans not secured by real estate: Commercial loans 49 212 Consumer loans 2 14 Total $ 3,230 3,758 At the end of each reporting period, the Bank determines which loans are impaired. Accordingly, the Bank’s impaired loans are reported at their estimated fair value on a non-recurring basis. An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral. The fair value of the collateral is based on appraisals performed by REAS, a subsidiary of the Bank. REAS is staffed by certified appraisers who also perform appraisals for third parties. Factors, including the assumptions and techniques utilized by the appraiser, are considered by management in determining the fair value of collateral. If the recorded investment in the impaired loan exceeds the measure of fair value of the collateral, a valuation allowance is recorded as a component of the allowance for loan losses. An allowance for each impaired loan that is not collateral dependent is calculated based on the present value of projected cash flows. If the recorded investment in the impaired loan exceeds the present value of projected cash flows, a valuation allowance is recorded as a component of the allowance for loan losses. Impaired loans under $250,000 are not individually evaluated for impairment with the exception of the Bank’s Troubled Debt Restructurings (“TDR loans”) in the residential mortgage loan portfolio, which are individually evaluated for impairment. Impaired loans collectively evaluated for impairment totaled $5.3 million, $5.8 million and $5.3 million at December 31, 2021, 2020 and 2019, respectively. Accruing impaired loans were $18.3 and $21.3 million at December 31, 2021 and December 31, 2020, respectively. Interest income recognized on accruing impaired loans was $1.0 million and $1.2 million for the years ended December 31, 2021 and 2020, respectively. No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual. The following tables present the Bank’s impaired loans as of December 31, 2021, 2020 and 2019: December 31, 2021 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 73 - 73 73 3 82 6 Single-family residential 5,138 524 4,374 4,898 86 6,017 253 Single-family residential - Banco de la Gente non-traditional 11,753 - 10,922 10,922 687 10,325 609 Commercial 2,138 435 1,608 2,043 11 2,385 109 Multifamily and farmland 113 - 105 105 - 110 6 Total impaired real estate loans 19,215 959 17,082 18,041 787 18,919 983 Loans not secured by real estate: Commercial loans 282 49 170 219 2 271 19 Consumer loans 8 - 4 4 - 11 1 Total impaired loans $ 19,505 1,008 17,256 18,264 789 19,201 1,003 A-51 December 31, 2020 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 108 - 108 108 4 134 8 Single-family residential 5,302 379 4,466 4,845 33 4,741 262 Single-family residential - Banco de la Gente non-traditional 13,417 - 12,753 12,753 862 13,380 798 Commercial 2,999 1,082 1,891 2,973 14 2,940 139 Multifamily and farmland 119 - 117 117 - 29 6 Total impaired real estate loans 21,945 1,461 19,335 20,796 913 21,224 1,213 Loans not secured by real estate: Commercial loans 515 211 244 455 5 564 32 Consumer loans 41 - 37 37 1 60 5 Total impaired loans $ 22,501 1,672 19,616 21,288 919 21,848 1,250 December 31, 2019 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 183 - 183 183 7 231 12 Single-family residential 5,152 403 4,243 4,646 36 4,678 269 Single-family residential - Banco de la Gente non-traditional 15,165 - 14,371 14,371 944 14,925 956 Commercial 1,879 - 1,871 1,871 7 1,822 91 Total impaired real estate loans 22,379 403 20,668 21,071 994 21,656 1,328 Loans not secured by real estate: Commercial loans 180 92 84 176 - 134 9 Consumer loans 100 - 96 96 2 105 7 Total impaired loans $ 22,659 495 20,848 21,343 996 21,895 1,344 The fair value measurements for mortgage loans held for sale, impaired loans and other real estate on a non-recurring basis at December 31, 2021 and 2020 are presented below. The Bank’s valuation methodology is discussed in Note 16. (Dollars in thousands) Fair Value Measurements December 31, 2021 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 3,637 - - 3,637 Impaired loans $ 17,475 - - 17,475 (Dollars in thousands) Fair Value Measurements December 31, 2020 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 9,139 - - 9,139 Impaired loans $ 20,369 - - 20,369 Other real estate $ 128 - - 128 A-52 (Dollars in thousands) Fair Value December 31, 2021 Fair Value December 31, 2020 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Mortgage loans held for sale $ 3,637 $ 9,139 Rate lock commitment N/A N/A Impaired loans $ 17,475 $ 20,369 Appraised value and discounted cash flows Discounts to reflect current market conditions and ultimate collectability 0 - 25% Other real estate $ - $ 128 Appraised value Discounts to reflect current market conditions and estimated costs to sell 0 - 25% The following table presents changes in the allowance for loan losses for the year ended December 31, 2021. PPP loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the SBA. (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Twelve months ended December 31,2021 Allowance for loan losses: Beginning balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Charge-offs - (89 ) - - - (293 ) - (380 ) - (762 ) Recoveries 121 271 - 52 3 786 - 139 - 1,372 Provision (124 ) (12 ) (188 ) (30 ) 25 (1,127 ) - 223 70 (1,163 ) Ending balance $ 1,193 2,013 864 2,234 150 711 - 110 2,080 9,355 Allowance for loan losses December 31, 2021 Ending balance: individually evaluated for impairment $ 1 57 672 7 - - - - - 737 Ending balance: collectively evaluated for impairment 1,192 1,956 192 2,227 150 711 - 110 2,080 8,618 Ending balance $ 1,193 2,013 864 2,234 150 711 - 110 2,080 9,355 Loans at December 31, 2021 Ending balance $ 95,760 266,111 23,147 337,841 58,366 91,172 796 11,676 - 884,869 Ending balance: individually evaluated for impairment $ 6 1,633 9,795 1,437 - 49 - - - 12,920 Ending balance: collectively evaluated for impairment $ 95,754 264,478 13,352 336,404 58,366 91,123 796 11,676 - 871,949 Changes in the allowance for loan losses for the year ended December 31, 2020 were as follows: A-53 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Twelve months ended December 31, 2020 Allowance for loan losses: Beginning balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Charge-offs (5 ) (65 ) - (7 ) - (903 ) - (434 ) - (1,414 ) Recoveries 36 70 - 70 - 34 - 173 - 383 Provision 471 564 (21 ) 844 2 1,526 - 251 622 4,259 Ending balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Allowance for loan losses December 31, 2020 Ending balance: individually evaluated for impairment $ 1 4 844 8 - - - - - 857 Ending balance: collectively evaluated for impairment 1,195 1,839 208 2,204 122 1,345 - 128 2,010 9,051 Ending balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Loans at December 31, 2020 Ending balance $ 94,124 272,325 26,883 332,971 48,880 161,740 855 10,861 - 948,639 Ending balance: individually evaluated for impairment $ 7 1,558 11,353 2,118 - 212 - - - 15,248 Ending balance: collectively evaluated for impairment $ 94,117 270,767 15,530 330,853 48,880 161,528 855 10,861 - 933,391 Changes in the allowance for loan losses for the year ended December 31, 2019 were as follows: (Dollars in thousands) December 31, 2019 Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Twelve months ended December 31, 2019 Allowance for loan losses: Beginning balance $ 813 1,325 1,177 1,278 83 626 - 161 982 6,445 Charge-offs (21 ) (42 ) - (1 ) - (389 ) - (623 ) - (1,076 ) Recoveries 45 66 - 49 - 83 - 205 - 448 Provision (143 ) (75 ) (104 ) (21 ) 37 368 - 395 406 863 Ending balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Allowance for loan losses December 31, 2019 Ending balance: individually evaluated for impairment $ 2 6 925 4 - - - - - 937 Ending balance: collectively evaluated for impairment 692 1,268 148 1,301 120 688 - 138 1,388 5,743 Ending balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Loans at December 31, 2019 Ending balance $ 92,596 269,475 30,793 291,255 48,090 100,263 1,033 16,369 - 849,874 Ending balance: individually evaluated for impairment $ 10 1,697 12,899 1,365 - 92 - - - 16,063 Ending balance: collectively evaluated for impairment $ 92,586 267,778 17,894 289,890 48,090 100,171 1,033 16,369 - 833,811 Impaired loans collectively evaluated for impairment totaled $5.3 million, $5.8 million and $5.3 million at December 31, 2021, 2020 and 2019, respectively and are included in the tables above. Allowance on impaired loans collectively evaluated for impairment totaled $52,000, $61,000 and $59,000 at December 31, 2021, 2020 and 2019, respectively. The Bank utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the eight risk grades is as follows: · Risk Grade 1 – Excellent Quality: Loans are well above average quality and a minimal amount of credit risk exists. CD or cash secured loans or properly margined actively traded stock or bond secured loans would fall in this grade. A-54 · Risk Grade 2 – High Quality: Loans are of good quality with risk levels well within the Bank’s range of acceptability. The organization or individual is established with a history of successful performance though somewhat susceptible to economic changes. · Risk Grade 3 – Good Quality: Loans of average quality with risk levels within the Bank’s range of acceptability but higher than normal. This may be a new organization or an existing organization in a transitional phase (e.g. expansion, acquisition, market change). · Risk Grade 4 – Management Attention: These loans have higher risk and servicing needs but still are acceptable. Evidence of marginal performance or deteriorating trends is observed. These are not problem credits presently, but may be in the future if the borrower is unable to change its present course. · Risk Grade 5 – 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. · Risk Grade 6 – 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. · Risk Grade 7 – Doubtful: Loans classified as 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. Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is charged off. · Risk Grade 8 – Loss: Loans classified as 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 realized in the future. Loss is a temporary grade until the appropriate authority is obtained to charge the loan off. The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of December 31, 2021 and 2020. December 31, 2021 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ - 5,923 - - - 371 - 581 - 6,875 2- High Quality 11,752 109,337 - 28,546 19 16,177 - 2,039 1,309 169,179 3- Good Quality 80,325 129,856 8,712 272,786 54,945 68,183 792 3,510 3,931 623,040 4- Management Attention 3,534 14,964 10,478 30,937 2,754 5,214 4 284 - 68,169 5- Watch 76 2,464 1,703 4,938 543 1,177 - 1 - 10,902 6- Substandard 73 3,567 2,254 634 105 50 - 21 - 6,704 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 95,760 266,111 23,147 337,841 58,366 91,172 796 6,436 5,240 884,869 A-55 December 31, 2020 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 228 9,867 - - - 406 - 678 - 11,179 2- High Quality 9,092 121,331 - 40,569 22 19,187 - 2,237 1,563 194,001 3- Good Quality 76,897 115,109 10,170 241,273 44,890 128,727 832 3,826 1,477 623,201 4- Management Attention 4,917 20,012 12,312 39,370 3,274 11,571 23 336 708 92,523 5- Watch 2,906 2,947 1,901 10,871 694 1,583 - 6 - 20,908 6- Substandard 84 3,059 2,500 888 - 266 - 30 - 6,827 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 94,124 272,325 26,883 332,971 48,880 161,740 855 7,113 3,748 948,639 Past due TDR loans and non-accrual TDR loans totaled $2.2 million and $3.8 million at December 31, 2021 and December 31, 2020, respectively. The terms of these loans have been renegotiated to provide a concession to original terms, including a reduction in principal or interest as a result of the deteriorating financial position of the borrower. There were no performing loans classified as TDR loans at December 31, 2021 and December 31, 2020. There were no new TDR modifications during the years ended December 31, 2021 and 2020. There were no TDR loans with a payment default occurring within 12 months of the restructure date, and the payment default occurring during the years ended December 31, 2021 and 2020. TDR loans are deemed to be in default if they become past due by 90 days or more. There were no loans at December 31, 2021 with modifications as a result of the COVID-19 pandemic. By way of comparison, at December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. The Bank continues to track all loans that were previously modified as a result of the COVID-19 pandemic. The loan balances associated with those loans that were previously modified as a result of the COVID-19 pandemic have been grouped into their own pool within the Bank’s ALLL model as management considers that they have a higher risk profile, and a higher reserve rate has been applied to this pool. Loans included in this pool totaled $88.7 million at December 31, 2021. The full effects of stimulus in the current environment are still unknown, and additional losses in this pool of loans may be present but not as yet identified. 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 $30.9 million decrease from December 31, 2020 to December 31, 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 year ended December 31, 2021. Loan payment modifications associated with the COVID-19 pandemic are not classified as TDR due to Section 4013 of the CARES Act, which provides that a qualified loan modification is exempt by law from classification as a TDR pursuant to GAAP.

4. Premises and Equipment

4. Premises and Equipment	12 Months Ended
4. Premises and Equipment	Dec. 31, 2021
4. Premises and Equipment
Premises and Equipment	(4) Premises and Equipment Major classifications of premises and equipment at December 31, 2021 and 2020 are summarized as follows: (Dollars in thousands) 2021 2020 Land $ 3,857 3,970 Buildings and improvements 18,359 18,804 Furniture and equipment 25,420 26,565 Construction in process - 10 Total premises and equipment 47,636 49,349 Less accumulated depreciation (31,532 ) (30,749 ) Total net premises and equipment $ 16,104 18,600 A-56 The Bank recognized depreciation expense totaling $2.6 million, $2.5 million and $2.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. The Bank had $105,000 net gains on the sale of and write-downs on premises and equipment for the year ended December 31, 2021. The Bank had no gains or losses on the sale of or write-downs on premises and equipment for the year ended December 31, 2020. The Bank had $239,000 net losses on the sale of and write-downs on premises and equipment for the year ended December 31, 2019.

5. Leases

5. Leases	12 Months Ended
5. Leases	Dec. 31, 2021
5. Leases
Leases	(5) Leases The Bank leases various office spaces for banking and operational facilities and equipment under operating lease arrangements. Total rent expense was approximately $703,000, $880,000and $949,000 for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, the Bank had operating right of use assets of $4.6 million and operating lease liabilities of $4.7 million. The Bank maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices. Most leases include one option to renew, with renewal terms extending up to 15 years. The exercise of renewal options is based on the judgment of management as to whether or not the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Bank if the option is not exercised. Leases with a term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term. The following table presents lease cost and other lease information as of December 31, 2021. (Dollars in thousands) December 31, 2021 Operating lease cost $ 737 Other information: Cash paid for amounts included in the measurement of lease liabilities 717 Operating cash flows from operating leases - Right-of-use assets obtained in exchange for new lease liabilities - operating leases 1,927 Weighted-average remaining lease term - operating leases 8.02 Weighted-average discount rate - operating leases 2.39 % The following table presents lease maturities as of December 31, 2021. (Dollars in thousands) Maturity Analysis of Operating Lease Liabilities: December 31, 2021 2022 $ 740 2023 746 2024 691 2025 635 2026 518 Thereafter 1,838 Total 5,168 Less: Imputed Interest (491 ) Operating Lease Liability $ 4,677

6. Time Deposits

6. Time Deposits	12 Months Ended
6. Time Deposits	Dec. 31, 2021
6. Time Deposits
Time Deposits	(6) Time Deposits At December 31, 2021, the scheduled maturities of time deposits are as follows: (Dollars in thousands) 2022 $ 51,615 2023 21,461 2024 20,663 2025 3,822 2026 and thereafter 3,689 Total $ 101,250 At December 31, 2021 and 2020, the Bank had approximately $11.1 million and $12.4 million, respectively, in time deposits purchased through third party brokers, including certificates of deposit participated through the Certificate of Deposit Account Registry Service (“CDARS”) on behalf of local customers. CDARS balances totaled $3.0 million and $4.3 million as of December 31, 2021 and 2020, respectively. The weighted average rate of brokered deposits as of December 31, 2021 and 2020 was 1.49% and 1.43%, respectively.

7. Federal Home Loan Bank and F

7. Federal Home Loan Bank and Federal Reserve Bank Borrowings	12 Months Ended
	Dec. 31, 2021
7. Federal Home Loan Bank and Federal Reserve Bank Borrowings
Federal Home Loan Bank and Federal Reserve Bank Borrowings	(7) Federal Home Loan Bank (FHLB) and Federal Reserve Bank Borrowings The Bank had no borrowings from the FHLB at December 31, 2021 and 2020. FHLB borrowings are collateralized by a blanket assignment on all residential first mortgage loans, home equity lines of credit and loans secured by multi-family real estate that the Bank owns. At December 31, 2021, the carrying value of loans pledged as collateral totaled approximately $137.4 million. The remaining availability under the line of credit with the FHLB was $90.9million at December 31, 2021. The Bank incurred a $1.1 million prepayment penalty on the prepayment of a $70.0 million FHLB advance in 2020. The Bank is required to purchase and hold certain amounts of FHLB stock in order to obtain FHLB borrowings. No ready market exists for the FHLB stock, and it has no quoted market value. The stock is redeemable at $100 per share subject to certain limitations set by the FHLB. The Bank owned $707,000and $1.0 million of FHLB stock, included in other investments, at December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Bank had no borrowings from the Federal Reserve Bank (“FRB”). FRB borrowings are collateralized by a blanket assignment on all qualifying loans that the Bank owns which are not pledged to the FHLB. At December 31, 2021, the carrying value of loans pledged as collateral totaled approximately $475.2 million. Availability under the line of credit with the FRB was $346.2 million at December 31, 2021.

8. Junior Subordinated Debentur

8. Junior Subordinated Debentures	12 Months Ended
8. Junior Subordinated Debentures	Dec. 31, 2021
8. Junior Subordinated Debentures
Junior Subordinated Debentures	(8) Junior Subordinated Debentures In June 2006, the Company formed a second wholly owned Delaware statutory trust, PEBK Capital Trust II (“PEBK Trust II”), which issued $20.0 million of guaranteed preferred beneficial interests in the Company’s junior subordinated deferrable interest debentures. All of the common securities of PEBK Trust II are owned by the Company. The proceeds from the issuance of the common securities and the trust preferred securities were used by PEBK Trust II to purchase $20.6 million of junior subordinated debentures of the Company. The proceeds received by the Company from the sale of the junior subordinated debentures were used to repay in December 2006 the trust preferred securities issued in December 2001 by PEBK Capital Trust, a wholly owned Delaware statutory trust of the Company, and for general purposes. The debentures represent the sole assets of PEBK Trust II. PEBK Trust II is not included in the consolidated financial statements. The trust preferred securities issued by PEBK Trust II accrue and pay interest quarterly at a floating rate of three-month LIBOR plus 163 basis points. The Company has guaranteed distributions and other payments due on the trust preferred securities. The net combined effect of all the documents entered into in connection with the trust preferred securities is that the Company is liable to make the distributions and other payments required on the trust preferred securities. These trust preferred securities are mandatorily redeemable upon maturity of the debentures on June 28, 2036. The Company has the right to redeem the debentures purchased by PEBK Trust II, in whole or in part, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount plus any accrued but unpaid interest. The Company has no financial instruments tied to LIBOR other than the trust preferred securities issued by PEBK Trust II, which are tied to three-month LIBOR. The one-week and two-month U.S. dollar-denominated (USD) LIBOR rates ceased to be published on December 31, 2021. The overnight, one-month, three-month, nine-month, and 12-month USD LIBOR rates will continue to be published through June 30, 2023.

9. Income Taxes

9. Income Taxes	12 Months Ended
9. Income Taxes	Dec. 31, 2021
9. Income Taxes
Income Taxes	(9) Income Taxes The provision for income taxes is summarized as follows: (Dollars in thousands) 2021 2020 2019 Current expense $ 4,079 3,049 2,972 Deferred income tax expense (283 ) (560 ) 164 Total income tax $ 3,796 2,489 3,136 The differences between the provision for income taxes and the amount computed by applying the statutory federal income tax rate to earnings before income taxes are as follows: (Dollars in thousands) 2021 2020 2019 Tax expense at statutory rate $ 3,975 2,908 3,613 State income tax, net of federal income tax effect 339 261 351 Tax-exempt interest income (497 ) (649 ) (802 ) Increase in cash surrender value of life insurance (83 ) (80 ) (81 ) Tax credits (234 ) (234 ) - Nondeductible interest and other expense 30 46 40 Other 266 237 15 Total $ 3,796 2,489 3,136 The following summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities. The net deferred tax asset is included as a component of other assets at December 31, 2021 and 2020. (Dollars in thousands) 2021 2020 Deferred tax assets: Allowance for loan losses $ 2,149 2,276 Accrued retirement expense 1,148 1,190 Restricted stock 209 190 Interest income on nonaccrual loans 2 1 Lease liability 1,075 798 Total gross deferred tax assets 4,583 4,455 Deferred tax liabilities: Deferred loan fees 263 284 Accumulated depreciation 563 873 Prepaid expenses 4 5 ROU Asset 1,060 787 Other (55 ) 41 Unrealized gain on available for sale securities 29 1,611 Total gross deferred tax liabilities 1,864 3,601 Net deferred tax asset $ 2,719 854 The Company has analyzed the tax positions taken or expected to be taken in its tax returns and has concluded that it has no liability related to uncertain tax positions. As of December 31, 2021, the Company’s Federal income tax filings for years 2018 through 2021 open to audit by the Internal Revenue Service. The Company’s North Carolina income tax returns are currently under A-59 audit for tax year 2014-2016, tax years 2018, 2019, 2020 and 2021 remain open to audit by the North Carolina Department of Revenue.

10. Related Party Transactions

10. Related Party Transactions	12 Months Ended
10. Related Party Transactions	Dec. 31, 2021
10. Related Party Transactions
Related Party Transactions	(10) Related Party Transactions The Company conducts transactions with its directors and executive officers, including companies in which they have beneficial interests, in the normal course of business. In accordance with Regulation O of the Federal Reserve, it is the policy of the Bank that loan transactions with directors and officers are made on substantially the same terms as those prevailing at the time made for comparable loans to other persons. The following is a summary of activity for related party loans for 2021 and 2020: (Dollars in thousands) 2021 2020 Beginning balance $ 1,852 3,472 New loans 3,636 4,189 Repayments (2,801 ) (5,809 ) Ending balance $ 2,687 1,852 At December 31, 2021 and 2020, the Company had deposit relationships with related parties of approximately $43.4 million and $44.5 million, respectively. A director of the Company has a membership interest in a company that previously leased two branch facilities to the Bank. The Bank purchased these branch facilities in September 2020. The Bank’s lease payments for these facilities totaled $173,000 for the year ended December 31, 2020.

11. Commitments and Contingenci

11. Commitments and Contingencies	12 Months Ended
11. Commitments and Contingencies	Dec. 31, 2021
11. Commitments and Contingencies
Commitments and Contingencies	(11) Commitments and Contingencies The Bank is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit and financial guarantees written is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. In most cases, the Bank requires collateral or other security to support financial instruments with credit risk. (Dollars in thousands) Contractual Amount 2021 2020 Financial instruments whose contract amount represent credit risk: Commitments to extend credit $ 304,258 299,039 Standby letters of credit $ 4,892 4,745 Commitments to extend credit are conditional agreements to lend to a customer. Commitments generally have fixed expiration dates and because they may expire without being drawn upon, the total commitment amount of $309.2 million does not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Bank to pay a third party on behalf of a customer. Those letters of credit are primarily issued to businesses in the Bank’s delineated market area. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds real estate, equipment, automobiles and customer deposits as collateral supporting those commitments for which collateral is deemed necessary. In the normal course of business, the Company is a party (both as plaintiff and defendant) to a number of lawsuits. In the opinion of management and counsel, none of these cases should have a material adverse effect on the financial position of the Company. A-60 The Company and the Bank have entered into employment agreements with certain key employees. The agreements, among other things, include salary, bonus, incentive compensation, and change in control provisions. The Company has $110.5 million available for the purchase of overnight federal funds from five correspondent financial institutions as of December 31, 2021. At December 31, 2017, the Bank committed to invest $3.0 million in an income tax credit partnership owning and developing two multifamily housing developments in Charlotte, North Carolina, with $1.5 million allocated to each property. As of December 31, 2021, the Bank has funded $2.9 million of this commitment. At December 31, 2021, the Bank had $2.2 million in unfunded commitments for SBA Small Business Investment Company (“SBIC”) investments.

12. Employee and Director Benef

12. Employee and Director Benefit Programs	12 Months Ended
12. Employee and Director Benefit Programs	Dec. 31, 2021
12. Employee and Director Benefit Programs
Employee and Director Benefit Programs	(12) Employee and Director Benefit Programs The Bank has a profit sharing and 401(k) plan for the benefit of substantially all employees subject to certain minimum age and service requirements. Under the 401(k) plan, the Bank matched employee contributions to a maximum of 4.00% of annual compensation in 2019, 2020 and 2021. The Company’s contribution pursuant to this formula was approximately $709,000, $692,000and $691,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Investments made available under the 401(k) plan are determined by a committee comprised of senior management. No investments in Company stock are available under the 401(k) plan. Contributions to the 401(k) plan are vested immediately. In December 2001, the Company initiated a retirement benefit plan to provide retirement benefits to key officers and its Board of Directors and to provide death benefits for their designated beneficiaries. Under the postretirement benefit plan, the Company purchased life insurance policies on the lives of the key officers and each director. The increase in cash surrender value of the policies constitutes the Company’s contribution to the postretirement benefit plan each year. Postretirement benefit plan participants are to be paid annual benefits for a specified number of years commencing upon retirement. Expenses incurred for benefits relating to the postretirement benefit plan were approximately $477,000, $388,000and $361,000for the years ended December 31, 2021, 2020 and 2019, respectively. The Company is currently paying medical benefits for certain retired employees. The Company did not incur any postretirement medical benefits expense in 2021, 2020 and 2019 due to an excess accrual balance. The following table sets forth the change in the accumulated benefit obligation for the Company’s two postretirement benefit plans described above: (Dollars in thousands) 2021 2020 Benefit obligation at beginning of period $ 4,870 4,700 Service cost 359 323 Interest cost 70 63 Benefits paid (288 ) (216 ) Benefit obligation at end of period $ 5,011 4,870 The amounts recognized in the Company’s Consolidated Balance Sheet as of December 31, 2021 and 2020 are shown in the following two tables: (Dollars in thousands) 2021 2020 Benefit obligation $ 5,011 4,870 Fair value of plan assets - - (Dollars in thousands) 2021 2020 Funded status $ (5,011 ) (4,870 ) Unrecognized prior service cost/benefit - - Unrecognized net actuarial loss - - Net amount recognized $ (5,011 ) (4,870 ) Unfunded accrued liability $ (5,011 ) (4,870 ) Intangible assets - - Net amount recognized $ (5,011 ) (4,870 ) Net periodic benefit cost of the Company’s postretirement benefit plans for the years ended December 31, 2021, 2020 and 2019 consisted of the following: (Dollars in thousands) 2021 2020 2019 Service cost $ 359 323 299 Interest cost 70 63 58 Net periodic cost $ 429 386 357 Weighted average discount rate assumption used to determine benefit obligation 5.50 % 5.49 % 5.49 % The Company paid benefits under the two postretirement plans totaling $288,000 and $216,000 during the years ended December 31, 2021 and 2020, respectively. Information about the expected benefit payments for the Company’s two postretirement benefit plans is as follows: (Dollars in thousands) Year ending December 31, 2022 $ 327 2023 $ 348 2024 $ 360 2025 $ 376 2026 $ 375 Thereafter $ 8,795

13. Regulatory Matters

13. Regulatory Matters	12 Months Ended
13. Regulatory Matters	Dec. 31, 2021
13. Regulatory Matters
Regulatory Matters	(13) Regulatory Matters The Company and the Bank are subject to regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum capital ratios in relation to both on- and off-balance sheet items at various risk weights. Total capital consists of two tiers of capital. Tier 1 capital includes common shareholders’ equity and trust preferred securities less adjustments for intangible assets. Tier 2 capital consists of the allowance for loan losses, up to 1.25% of risk-weighted assets and other adjustments. Management believes, as of December 31, 2021, that the Company and the Bank meet all capital adequacy requirements to which they are subject. As of December 31, 2021, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There have been no conditions or events since that notification that management believes have changed the Bank’s category. In 2013, the Federal Reserve approved its final rule on the Basel III capital standards, which implement changes to the regulatory capital framework for banking organizations. The Basel III capital standards, which became effective January 1, 2015, include new risk-based capital and leverage ratios, which were phased in from 2015 to 2019. The new minimum capital level requirements applicable to the Company and the Bank under the final rules are as follows: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total risk based capital ratio of 8% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 4% (unchanged from previous rules). An additional capital conservation buffer was added to the minimum requirements for capital adequacy purposes beginning on January 1, 2016 and was phased in through 2019 (increasing by 0.625% on January 1, 2016 and each subsequent January 1, until it reached 2.5% on January 1, 2019). This resulted in the following minimum ratios beginning in 2019: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. Under the final rules, institutions would be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained earnings that could be utilized for such actions. The Company’s and the Bank’s actual capital amounts and ratios are presented below: (Dollars in thousands) Actual Minimum Regulatory Capital Ratio Minimum Ratio plus Capital Conservation Buffer Amount Ratio Amount Ratio Amount Ratio As of December 31, 2021: Total Capital (to Risk-Weighted Assets) Consolidated $ 166,628 16.35 % 81,547 8.00 % N/A N/A Bank $ 164,975 16.19 % 81,539 8.00 % 107,020 10.50 % Tier 1 Capital (to Risk-Weighted Assets) Consolidated $ 157,273 15.43 % 61,160 6.00 % N/A N/A Bank $ 155,620 15.27 % 61,154 6.00 % 86,635 8.50 % Tier 1 Capital (to Average Assets) Consolidated $ 157,273 9.64 % 65,258 4.00 % N/A N/A Bank $ 155,620 9.50 % 65,557 4.00 % 65,557 4.00 % Common Equity Tier 1 (to Risk-Weighted Assets) Consolidated $ 142,273 13.96 % 45,870 4.50 % N/A N/A Bank $ 155,620 15.27 % 45,866 4.50 % 71,347 7.00 % (Dollars in thousands) Actual Minimum Regulatory Capital Ratio Minimum Ratio plus Capital Conservation Buffer Amount Ratio Amount Ratio Amount Ratio As of December 31, 2020: Total Capital (to Risk-Weighted Assets) Consolidated $ 159,407 16.07 % 79,372 8.00 % N/A N/A Bank $ 157,106 15.85 % 79,283 8.00 % 104,059 10.50 % Tier 1 Capital (to Risk-Weighted Assets) Consolidated $ 149,499 15.07 % 59,529 6.00 % N/A N/A Bank $ 147,198 14.85 % 59,462 6.00 % 84,238 8.50 % Tier 1 Capital (to Average Assets) Consolidated $ 149,499 10.24 % 58,378 4.00 % N/A N/A Bank $ 147,198 10.04 % 58,662 4.00 % 58,662 4.00 % Common Equity Tier 1 (to Risk-Weighted Assets) Consolidated $ 134,499 13.56 % 44,647 4.50 % N/A N/A Bank $ 147,198 14.85 % 44,597 4.50 % 69,373 7.00 %

14. Shareholders' Equity

14. Shareholders' Equity	12 Months Ended
14. Shareholders' Equity	Dec. 31, 2021
14. Shareholders' Equity
Shareholders' Equity	(14) Shareholders’ Equity Shareholders’ equity was $142.4 million, or 8.77% of total assets, at December 31, 2021, compared to $139.9 million, or 9.88% of total assets, at December 31, 2020. The increase in shareholders’ equity is primarily due to an increase in retained earnings due to net earnings. Total cash dividends paid on common stock were $3.8 million and $4.4 million for the years ended December 31, 2021 and 2020, respectively. The Board of Directors, at its discretion, can issue up to 5,000,000 shares of preferred stock. The Board is authorized to determine the number of shares, voting powers, designations, preferences, limitations and relative rights. The Board of Directors does not currently anticipate issuing shares of preferred stock. In 2020, the Board of Directors authorized a stock repurchase program, whereby up to $3 million was allocated to repurchase the Company’s common stock. Any purchases under the Company’s stock repurchase program may be made periodically as permitted by securities laws and other legal requirements in the open market or in privately-negotiated transactions. The timing and amount of any repurchase of shares will be determined by the Company’s management, based on its evaluation of market conditions and other factors. The stock repurchase program may be suspended at any time or from time-to-time without prior notice. The Company repurchased approximately $3.0 million, or 126,800 shares of its common stock, under this stock repurchase program through December 31, 2020. In 2021, the Board of Directors authorized an additional stock repurchase program, whereby up to $4.0 million will be allocated to repurchase the Company’s common stock. Any purchases under the Company’s stock repurchase program may be made periodically as permitted by securities laws and other legal requirements in the open market or in privately-negotiated transactions. The timing and amount of any repurchase of shares will be determined by the Company’s management, based on its evaluation of market conditions and other factors. The stock repurchase program may be suspended at any time or from time-to-time without prior notice. The Company has repurchased approximately $3.6million, or 127,597 shares of its common stock, under this stock repurchase program as of December 31, 2021.

15. Other Operating Income and

15. Other Operating Income and Expense	12 Months Ended
15. Other Operating Income and Expense	Dec. 31, 2021
15. Other Operating Income and Expense
Other Operating Income and Expense	(15) Other Operating Income and Expense Miscellaneous non-interest income for the years ended December 31, 2021, 2020 and 2019 included the following items: (Dollars in thousands) 2021 2020 2019 Visa debit card income $ 5,045 4,237 4,145 Bank owned life insurance income 397 380 383 Gain (loss) on sale of premises and equipment 105 - (239 ) Other 2,092 1,315 1,559 $ 7,639 5,932 5,848 Other non-interest expense for the years ended December 31, 2021, 2020 and 2019 included the following items: (Dollars in thousands) 2021 2020 2019 ATM expense $ 619 567 579 Data processing 643 635 616 Deposit program expense 415 426 515 Dues and subscriptions 588 538 421 FHLB advance prepayment penalty - 1,100 - Internet banking expense 768 729 681 Office supplies 374 538 467 Telephone 730 794 802 Other 3,737 3,217 3,893 $ 7,874 8,544 7,974

16. Fair Value of Financial Ins

16. Fair Value of Financial Instruments	12 Months Ended
16. Fair Value of Financial Instruments	Dec. 31, 2021
16. Fair Value of Financial Instruments
Fair Value of Financial Instruments	(16) Fair Value of Financial Instruments The Company is required to disclose fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of the Company’s financial instruments are detailed below. Where quoted prices are not available, fair values are based on estimates using discounted cash flows and other valuation techniques. The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good faith estimate of the increase or decrease in the value of financial instruments held by the Company since purchase, origination, or issuance. The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: · 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. Cash and Cash Equivalents For cash, due from banks and interest-bearing deposits, the carrying amount is a reasonable estimate of fair value. Cash and cash equivalents are reported in the Level 1 fair value category. Investment Securities Available for Sale Fair values of investment securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges when available. If quoted prices are not available, fair value is determined using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Fair values for investment securities with quoted market prices are reported in the Level 1 fair value category. Fair value measurements obtained from independent pricing services are reported in the Level 2 fair value category. All other fair value measurements are reported in the Level 3 fair value category. Other Investments For other investments, the carrying value is a reasonable estimate of fair value. Other investments are reported in the Level 3 fair value category. Mortgage Loans Held for Sale Mortgage loans held for sale are carried at lower of aggregate cost or market value. The cost of mortgage loans held for sale approximates the market value. Mortgage loans held for sale are reported in the Level 3 fair value category. Loans The fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. Loans are reported in the Level 3 fair value category, as the pricing of loans is more subjective than the pricing of other financial instruments. Mutual Funds For mutual funds held in the deferred compensation trust, the carrying value is a reasonable estimate of fair value. Mutual funds held in the deferred compensation trust are included in other assets on the balance sheet and reported in the Level 2 fair value category. Deposits The fair value of demand deposits, interest-bearing demand deposits and savings is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. Deposits are reported in the Level 3 fair value category. Securities Sold Under Agreements to Repurchase For securities sold under agreements to repurchase, the carrying value is a reasonable estimate of fair value. Securities sold under agreements to repurchase are reported in the Level 2 fair value category. FHLB Borrowings The fair value of FHLB borrowings is estimated based upon discounted future cash flows using a discount rate comparable to the current market rate for such borrowings. FHLB borrowings are reported in the Level 3 fair value category. Junior Subordinated Debentures Because the Company’s junior subordinated debentures were issued at a floating rate, the carrying amount is a reasonable estimate of fair value. Junior subordinated debentures are reported in the Level 2 fair value category. Commitments to Extend Credit and Standby Letters of Credit Commitments to extend credit and standby letters of credit are generally short-term and at variable interest rates. Therefore, both the carrying value and estimated fair value associated with these instruments are immaterial. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. The fair value presentation for recurring assets is presented in Note 2. There were no recurring liabilities at December 31, 2021 and 2020. The fair value presentation for non-recurring assets is presented in Note 3. There were no non-recurring liabilities at December 31, 2021 and 2020. The carrying amount and estimated fair value of the Company’s financial instruments at December 31, 2021 and 2020 are as follows: (Dollars in thousands) Fair Value Measurements at December 31, 2021 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 277,499 277,499 - - 277,499 Investment securities available for sale 406,549 - 406,549 - 406,549 Other investments 3,668 - - 3,668 3,668 Mortgage loans held for sale 3,637 - - 3,637 3,637 Loans, net 875,514 - - 855,814 855,814 Mutual funds held in deferred compensation trust 1,510 - 1,510 - 1,510 Liabilities: Deposits $ 1,412,748 - - 1,401,833 1,401,833 Securities sold under agreements to repurchase 37,094 - 37,094 - 37,094 Junior subordinated debentures 15,464 - 15,464 - 15,464 (Dollars in thousands) Fair Value Measurements at December 31, 2020 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 161,580 161,580 - - 161,580 Investment securities available for sale 245,249 - 245,249 - 245,249 Other investments 4,155 - - 4,155 4,155 Mortgage loans held for sale 9,139 - - 9,139 9,139 Loans, net 938,731 - - 924,845 924,845 Mutual funds held in deferred compensation trust 1,320 - 1,320 - 1,320 Liabilities: Deposits $ 1,221,086 - - 1,216,503 1,216,503 Securities sold under agreements to repurchase 26,201 - 26,201 - 26,201 Junior subordinated debentures 15,464 - 15,464 - 15,464

Peoples Bancorp of North Caroli

Peoples Bancorp of North Carolina, Inc. (Parent Company Only) Condensed Financial Statements	12 Months Ended
	Dec. 31, 2021
Peoples Bancorp of North Carolina, Inc. (Parent Company Only) Condensed Financial Statements
Peoples Bancorp of North Carolina, Inc. (Parent Company Only) Condensed Financial Statements	(17) Peoples Bancorp of North Carolina, Inc. (Parent Company Only) Condensed Financial Statements Balance Sheets December 31, 2021 and 2020 (Dollars in thousands) Assets 2021 2020 Cash $ 561 664 Interest-bearing time deposit 1,000 1,000 Investment in subsidiaries 155,716 152,598 Investment in PEBK Capital Trust II 464 464 Other assets 105 650 Total assets $ 157,846 155,376 Liabilities and Shareholders' Equity Junior subordinated debentures $ 15,464 15,464 Liabilities 13 13 Shareholders' equity 142,369 139,899 Total liabilities and shareholders' equity $ 157,846 155,376 Statements of Earnings For the Years Ended December 31, 2021, 2020 and 2019 (Dollars in thousands) Revenues: 2021 2020 2019 Interest and dividend from subsidiary $ 7,419 7,539 12,850 Total revenues 7,419 7,539 12,850 Expenses: Interest 280 370 844 Other operating expenses 613 625 629 Total expenses 893 995 1,473 Income before income tax benefit and equity in undistributed earnings of subsidiaries 6,526 6,544 11,377 Income tax benefit 185 201 299 Income before equity in undistributed earnings of subsidiaries 6,711 6,745 11,676 Equity in undistributed earnings of subsidiaries 8,422 4,612 2,391 Net earnings $ 15,133 11,357 14,067 Statements of Cash Flows For the Years Ended December 31, 2021, 2020 and 2019 (Dollars in thousands) 2021 2020 2019 Cash flows from operating activities: Net earnings $ 15,133 11,357 14,067 Adjustments to reconcile net earnings to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (8,422 ) (4,612 ) (2,391 ) Change in: Other assets 545 (19 ) 57 Other liabilities - (10 ) (13 ) Net cash provided by operating activities 7,256 6,716 11,720 Cash flows from investing activities: Proceeds from calls and maturities of investment securities available for sale - 250 - Net cash provided by investing activities - 250 - Cash flows from financing activities: Repayment of junior subordinated debentures - (155 ) (5,000 ) Cash dividends paid on common stock (3,793 ) (4,392 ) (3,939 ) Stock repurchase (3,605 ) (2,999 ) (2,490 ) Proceeds from exercise of restricted stock units 39 57 207 Net cash used by financing activities (7,359 ) (7,489 ) (11,222 ) Net change in cash (103 ) (523 ) 498 Cash at beginning of year 664 1,187 689 Cash at end of year $ 561 664 1,187

18. Quarterly Data

18. Quarterly Data	12 Months Ended
18. Quarterly Data	Dec. 31, 2021
18. Quarterly Data
Quarterly Data	(18) Quarterly Data 2021 2020 (Dollars in thousands, except per share amounts) First Second Third Fourth First Second Third Fourth Total interest income $ 11,922 12,517 11,421 11,319 $ 12,250 11,638 11,868 12,202 Total interest expense 815 842 861 687 1,041 912 942 941 Net interest income 11,107 11,675 10,560 10,632 11,209 10,726 10,926 11,261 Provision for loan losses (455 ) (226 ) (182 ) (300 ) 1,521 1,417 522 799 Other income 5,873 6,040 6,040 6,966 4,595 5,239 7,132 5,948 Other expense 12,268 12,132 12,568 14,159 11,449 11,452 11,914 14,116 Income before income taxes 5,167 5,809 4,214 3,739 2,834 3,096 5,622 2,294 Income tax expense 1,046 1,194 824 732 467 535 1,113 374 Net earnings 4,121 4,615 3,390 3,007 2,367 2,561 4,509 1,920 Basic net earnings per share $ 0.73 0.82 0.61 0.55 $ 0.41 0.46 0.80 0.34 Diluted net earnings per share $ 0.71 0.80 0.59 0.53 $ 0.40 0.44 0.78 0.33

19. Subsequent Events

19. Subsequent Events	12 Months Ended
19. Subsequent Events	Dec. 31, 2021
19. Subsequent Events
Subsequent Events	(19) Subsequent Events The Company has reviewed and evaluated subsequent events and transactions for material subsequent events through the date the financial statements are issued. The SBA has continued to forgive the Bank’s PPP loans. The outstanding balance of PPP loans was $9.3 million at March 11, 2022, as compared to $18.0 million at December 31, 2021. The decrease from December 31, 2021 to March 11, 2022 was primarily due to PPP loans being forgiven by the SBA.

1. Summary of Significant Acc_2

1. Summary of Significant Accounting Policies (Policies)	12 Months Ended
1. Summary of Significant Accounting Policies (Policies)	Dec. 31, 2021
1. Summary of Significant Accounting Policies
Principles of Consolidation	The consolidated financial statements include the financial statements of Bancorp and its wholly owned subsidiary, the Bank, along with the Bank’s wholly owned subsidiaries, PIS, REAS, CBRES and PBREH. All significant intercompany balances and transactions have been eliminated in consolidation.
Correction of an Error	Subsequent to issuance of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets. The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability. For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments. This resulted in an increase to these line items of $1.3 million. Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020. On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $1.95 to $2.01 for the year ended December 31, 2020 and from $2.37 to $2.43 for the year ended December 31, 2019. The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements. These changes to basic earnings per share are also reflected within Note 1 to the financial statements below. In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares. The Company’s Consolidated Statements of Cash Flows were adjusted for the years ended December 31, 2020 and 2019 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets. The adjustments to correct the error noted above were not considered material to the financial statements.
Stock-Based Compensation	Stock-Based Compensation The Company has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2009 (the “2009 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. The 2009 Plan expired on May 7, 2019 but still governs the rights and obligations of the parties for grants made thereunder. No new awards may be made after May 7, 2019. The Company granted 16,583 restricted stock units under the 2009 Plan at a grant date fair value of $16.34 per share during the first quarter of 2015. The Company granted 5,544 restricted stock units under the 2009 Plan at a grant date fair value of $16.91 per share during the first quarter of 2016. The Company granted 4,114 restricted stock units under the 2009 Plan at a grant date fair value of $25.00 per share during the first quarter of 2017. The Company granted 3,725 restricted stock units under the 2009 Plan at a grant date fair value of $31.43 per share during the first quarter of 2018. The Company granted 5,290 restricted stock units under the 2009 Plan at a grant date fair value of $28.43 per share during the first quarter of 2019. The number of restricted stock units granted and grant date fair values for the restricted stock units granted in 2015 through 2017 have been restated to reflect the 10% stock dividend that was paid in the fourth quarter of 2017. The Company recognizes compensation expense on the restricted stock units over the vesting period (four years from the grant date for the 2015, 2016, 2017, 2018 and 2019 grants). The amount of expense recorded each period reflects the changes in the Company’s stock price during such period. As of December 31, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2009 Plan was $38,000. The Company also has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2020 (the “2020 Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. A total of 300,000 shares were reserved for possible issuance under the 2020 Plan when it was adopted. As of December 31, 2021, a total of 285,305 shares out of the initial 300,000 shares reserved remain available for future issuance under the 2020 Plan. No new awards may be made after May 7, 2030 (ten years from the 2020 Plan effective date). The Company granted 7,635 restricted stock units under the 2020 Plan at a grant date fair value of $17.08 per share during the second quarter of 2020. The Company granted 7,060 restricted stock units under the 2020 Plan at a grant date fair value of $22.04 per share during the first quarter of 2021. The Company recognizes compensation expense on the restricted stock units over the vesting period (four years from the grant date for 2020 and 2021 grants). As of December 31, 2021, the total unrecognized compensation expense related to the restricted stock unit grants under the 2020 Plan was $273,000. The Company recognized compensation expense for restricted stock units granted under the 2009 Plan and 2020 Plan of $181,000 and $27,000 for the years ended December 31, 2021 and 2020, respectively. The Company recognized compensation expense for restricted stock units granted under the 2009 Plan of $270,000 for the year ended December 31, 2019. Net Earnings Per Share Net earnings per common share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per common share. The average market price during the year is used to compute equivalent shares. The reconciliations of the amounts used in the computation of both “basic earnings per common share” and “diluted earnings per common share” for the years ended December 31, 2021, 2020 and 2019 are as follows: For the year ended December 31, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 15,133 5,576,099 $ 2.71 Effect of dilutive securities: Restricted stock units - unvested - 13,935 Shares held in deferred comp plan 158,831 Diluted earnings per share $ 15,133 5,748,865 $ 2.63 For the year ended December 31, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 11,357 5,657,025 $ 2.01 Effect of dilutive securities: Restricted stock units - unvested - 14,203 Shares held in deferred comp plan - 150,394 Diluted earnings per share $ 11,357 5,821,622 $ 1.95 A-41 For the year ended December 31, 2019 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 14,067 5,799,505 $ 2.43 Effect of dilutive securities: Restricted stock units - unvested - 25,438 Shares held in deferred comp plan - 141,542 Diluted earnings per share $ 14,067 5,966,485 $ 2.36
Recent Accounting Pronouncements	Recent Accounting Pronouncements The following tables provide a summary of Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”) that the Company has recently adopted. ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2019-07: Codification Updates to SEC Sections Guidance updated for various Topics of the ASC to align the guidance in various SEC sections of the ASC with the requirements of certain SEC final rules. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2018-14: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20) Updates disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. A-43 ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2020-01: Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) Guidance to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. January 1, 2021 The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-02: Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update) Guidance to add and amend SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 119 related to the new credit losses standard and comments by the SEC staff related to the revised effective date of the new leases standard. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2021-06: Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946) Amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. Effective upon issuance The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. The following tables provide a summary of ASU’s issued by the FASB that the Company has not adopted as of December 31, 2021, which may impact the Company’s financial statements. Recently Issued Accounting Guidance Not Yet Adopted ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2016-13: Measurement of Credit Losses on Financial Instruments Provides guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. See ASU 2019-10 below. The Company will apply this guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The Company is still evaluating the impact of this guidance on its consolidated financial statements. The Company has formed a Current Expected Credit Losses (“CECL”) committee and implemented a model from a third-party vendor for running CECL calculations. The Company is currently developing CECL model assumptions and comparing results to current allowance for loan loss calculations. The Company plans to run parallel calculations leading up to the effective date of this guidance to ensure it is prepared for implementation by the effective date. In addition to the Company’s allowance for loan losses, it will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. A-44 ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses Aligns the implementation date of the topic for annual financial statements of nonpublic companies with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the topic, but rather, should be accounted for in accordance with the leases topic. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Addresses unintended issues accountants flagged when implementing ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-05: Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief Guidance to provide entities with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments. See ASU 2019-10 below. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. ASU 2019-10: Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates Guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected credit losses (CECL), leases and hedging. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments—Credit Losses Guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments affect a variety of Topics in the ASC. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-03: Codification Improvements to Financial Instruments Guidance to clarify that the contractual term of a net investment in a lease, determined in accordance with the leases standard, should be the contractual term used to measure expected credit losses under ASC 326. January 1, 2023 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Guidance that provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be in effect for a limited time through December 31, 2022. March 12, 2020 through December 31, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. ASU 2020-06: Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Guidance to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. January 1, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. A-45 ASU Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2021-05: Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate Updated guidance that requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if certain conditions are met January 1, 2022 The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Reclassification Certain amounts in the 2020 and 2019 consolidated financial statements have been reclassified to conform to the 2021 presentation.
Income Taxes	Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Additionally, the recognition of future tax benefits, such as net operating loss carryforwards, is required to the extent that the realization of such benefits is more likely than not to occur. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities results in a deferred tax asset, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some portion or all of the deferred tax asset will not be realized. In assessing the realizability of a deferred tax asset, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. Tax effects from an uncertain tax position can be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Previously recognized tax positions that no longer meet the more likely than not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company assessed the impact of this guidance and determined that it did not have a material impact on the Company’s financial position, results of operations or disclosures.
Premises and Equipment	Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is reflected in earnings for that period. The cost of maintenance and repairs that do not improve or extend the useful life of the respective asset is charged to earnings as incurred, whereas significant renewals and improvements are capitalized. The range of estimated useful lives for premises and equipment are generally as follows: Buildings and improvements 10- 50 years Furniture and equipment 3 - 10 years
Mortgage Banking Activities	Mortgage Banking Activities Mortgage banking income represents income from the sale of mortgage loans and fees received from borrowers and loan investors related to the Bank’s origination of single-family residential mortgage loans. Mortgage loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balances of mortgage loans serviced for others was approximately $351,000, $578,000 and $729,000 at December 31, 2021, 2020 and 2019, respectively. Mortgage servicing rights related to these loans are immaterial for all periods presented. The Bank originates certain fixed rate mortgage loans and commits these loans for sale. The commitments to originate fixed rate mortgage loans and the commitments to sell these loans to a third party are both derivative contracts. The fair value of these derivative contracts is immaterial and has no effect on the recorded amounts in the financial statements.
Other Investments	Other investments include equity securities with no readily determinable fair value. These investments are carried at cost.
Loans	Loans that management has the intent and ability to hold for the foreseeable future or until maturity are reported at the principal amount outstanding, net of the allowance for loan losses. Interest on loans is calculated by using the simple interest method on daily balances of the principal amount outstanding. The recognition of certain loan origination fee income and certain loan origination costs is deferred when such loans are originated and amortized over the life of the loan. A loan is impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan will not be collected. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, or at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Accrual of interest is discontinued on a loan when management believes, after considering economic conditions and collection efforts, that the borrower’s financial condition is such that collection of interest is doubtful. Interest previously accrued but not collected is reversed against current period earnings. Allowance for Loan Losses The allowance for loan losses (“ALLL” or “allowance”) reflects management’s assessment and estimate of the risks associated with extending credit and its evaluation of the quality of the loan portfolio. The Bank periodically analyzes the loan portfolio in an effort to review asset quality and to establish an allowance that management believes will be adequate in light of anticipated risks and loan losses. In assessing the adequacy of the allowance, size, quality and risk of loans in the portfolio are reviewed. Other factors considered are: · the Bank’s loan loss experience; · the amount of past due and non-performing loans; · specific known risks; · the status and amount of other past due and non-performing assets; · underlying estimated values of collateral securing loans; · current and anticipated economic conditions; and · other factors which management believes affect the allowance for potential credit losses. Management uses several measures to assess and monitor the credit risks in the loan portfolio, including a loan grading system that begins upon loan origination and continues until the loan is collected or collectability becomes doubtful. Upon loan origination, the Bank’s originating loan officer evaluates the quality of the loan and assigns one of eight risk grades. The loan officer monitors the loan’s performance and credit quality and makes changes to the credit grade as conditions warrant. When originated or renewed, all loans over a certain dollar amount receive in-depth reviews and risk assessments by the Bank’s Credit Administration. Before making any changes in these risk grades, management considers assessments as determined by the third party credit review firm (as described below), regulatory examiners and the Bank’s Credit Administration. Any issues regarding the risk assessments are addressed by the Bank’s senior credit administrators and factored into management’s decision to originate or renew the loan. The Bank’s Board of Directors reviews, on a monthly basis, an analysis of the Bank’s reserves relative to the range of reserves estimated by the Bank’s Credit Administration. As an additional measure, the Bank engages an independent third party to review the underwriting, documentation and risk grading analyses. This independent third party reviews and evaluates loan relationships greater than or equal to $1.5 million as well as a periodic sample of commercial relationships with exposures below $1.5 million, excluding loans in default, and loans in process of litigation or liquidation. The third party’s evaluation and report is shared with management and the Board of Directors of the Bank (“Bank Board”). Management considers certain commercial loans with weak credit risk grades to be individually impaired and measures such impairment based upon available cash flows and the value of the collateral. Allowance or reserve levels are estimated for all other graded loans in the portfolio based on their assigned credit risk grade, type of loan and other matters related to credit risk. Management uses the information developed from the procedures described above in evaluating and grading the loan portfolio. This continual grading process is used to monitor the credit quality of the loan portfolio and to assist management in estimating the allowance. The provision for loan losses charged or credited to earnings is based upon management’s judgment of the amount necessary to maintain the allowance at a level appropriate to absorb probable incurred losses in the loan portfolio at the balance sheet date. The amount each quarter is dependent upon many factors, including growth and changes in the composition of the loan portfolio, net charge-offs, delinquencies, management’s assessment of loan portfolio quality, the value of collateral, and other macro-economic factors and trends. The evaluation of these factors is performed quarterly by management through an analysis of the appropriateness of the allowance. The allowance is comprised of three components: specific reserves, general reserves and unallocated reserves. After a loan has been identified as impaired, management measures impairment. When the measure of the impaired loan is less than the recorded investment in the loan, the amount of the impairment is recorded as a specific reserve. These specific reserves are determined on an individual loan basis based on management’s current evaluation of the Bank’s loss exposure for each credit, given the appraised value of any underlying collateral. Loans for which specific reserves are provided are excluded from the general allowance calculations as described below. The general allowance reflects reserves established under GAAP for collective loan impairment. These reserves are based upon historical net charge-offs using the greater of the last two, three, four, or five years’ loss experience. This charge-off experience may be adjusted to reflect the effects of current conditions. The Bank considers information derived from its loan risk ratings and external data related to industry and general economic trends in establishing reserves. Qualitative factors applied in the Bank’s ALLL model include the impact to the economy from the COVID-19 pandemic and reserves on loans with payment modifications as a result of the COVID-19 pandemic. At December 31, 2021, there were no loans with existing modifications as a result of the COVID-19 pandemic. At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. At December 31, 2021, the Bank continues to maintain a pool of loans that were previously modified as a result of the COVID-19 pandemic. The loan balances associated with those loans that were previously modified as a result of the COVID-19 pandemic related modifications have been grouped into their own pool within the Bank’s ALLL model as management considers that they have a higher risk profile, and a higher reserve rate has been applied to this pool. As such, a higher reserve rate has been applied to this pool. Loans included in this pool totaled $88.7 million and $119.6 million at December 31, 2021 and December 31, 2020, respectively. The unallocated allowance is determined through management’s assessment of probable losses that are in the portfolio but are not adequately captured by the other two components of the allowance, including consideration of current economic and business conditions and regulatory requirements. The unallocated allowance also reflects management’s acknowledgement of the imprecision and subjectivity that underlie the modeling of credit risk. Due to the subjectivity involved in determining the overall allowance, including the unallocated portion, the unallocated portion may fluctuate from period to period based on management’s evaluation of the factors affecting the assumptions used in calculating the allowance. There were no significant changes in the estimation methods or fundamental assumptions used in the evaluation of the allowance for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Revisions, estimates and assumptions may be made in any period in which the supporting factors indicate that loss levels may vary from the previous estimates. Effective December 31, 2012, certain mortgage loans from the former Banco division of the Bank were analyzed separately from other single family residential loans in the Bank’s loan portfolio. These loans are first mortgage loans made to the Latino market, primarily in Mecklenburg, North Carolina and surrounding counties. These loans are non-traditional mortgages in that the customer normally did not have a credit history, so all credit information was accumulated by the loan officers. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans are excluded from the allowance as PPP loans are 100 percent guaranteed by the SBA. Various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance. Such agencies may require adjustments to the allowance based on their judgments of information available to them at the time of their examinations. Management believes it has established the allowance for credit losses pursuant to GAAP, and has taken into account the views of its regulators and the current economic environment. Management considers the allowance adequate to cover the estimated losses inherent in the Bank’s loan portfolio as of the date of the financial statements. Although management uses the best information available to make evaluations, significant future additions to the allowance may be necessary based on changes in economic and other conditions, thus adversely affecting the operating results of the Company.
Other Real Estate	Foreclosed assets include all assets received in full or partial satisfaction of a loan. Foreclosed assets are reported at fair value less estimated selling costs. Any write-downs at the time of foreclosure are charged to the allowance. Subsequent to foreclosure, valuations are periodically performed by management, and a valuation allowance is established if fair value less estimated selling costs declines below carrying value. Costs relating to the development and improvement of the property are capitalized. Revenues and expenses from operations are included in other expenses. Changes in the valuation allowance are included in loss on sale and write-down of other real estate.
Advertising Costs	Advertising costs are expensed as incurred.
Revenue Recognition	Revenue Recognition The Company has applied ASU 2014-09 using a modified retrospective approach. The Company’s revenue is comprised of net interest income and noninterest income. The scope of ASU 2014-09 explicitly excludes net interest income as well as many other revenues for financial assets and liabilities including loans, leases, securities, and derivatives. Accordingly, the majority of the Company’s revenues are not affected. Appraisal management fee income and expense from the Bank’s subsidiary, CBRES, was reported as a net amount prior to March 31, 2018, which was included in miscellaneous non-interest income. This income and expense is now reported on separate line items under non-interest income and non-interest expense. See below for additional information related to revenue generated from contracts with customers. Revenue and Method of Adoption The majority of the Company’s revenue is derived primarily from interest income from receivables (loans) and securities. Other revenues are derived from fees received in connection with deposit accounts, investment advisory, and appraisal services. On January 1, 2018, the Company adopted the requirements of ASU 2014-09. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU 2014-09 using the modified retrospective transition approach which does not require restatement of prior periods. The method was selected as there were no material changes in the timing of revenue recognition resulting in no comparability issues with prior periods. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature of, and reason for, the change, which is solely a result of the adoption of the required standard. When applying the modified retrospective approach under ASU 2014-09, the Company has elected, as a practical expedient, to apply this approach only to contracts that were not completed as of January 1, 2018. A completed contract is considered to be a contract for which all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before January 1, 2018. There were no uncompleted contracts as of January 1, 2018 for which application of the new standard required an adjustment to retained earnings. The following disclosures involve the Company’s material income streams derived from contracts with customers which are within the scope of ASU 2014-09. Through the Company’s wholly-owned subsidiary, PIS, the Company contracts with a registered investment advisor to perform investment advisory services on behalf of the Company’s customers. The Company receives commissions from this third party investment advisor based on the volume of business that the Company’s customers do with such investment advisor. Total revenue recognized from these contracts was $1.0 million, $896,000 and $876,000 for the years ended December 31, 2021, 2020 and 2019, respectively. The Company utilizes third parties to contract with the Company’s customers to perform debit and credit card clearing services. These third parties pay the Company commissions based on the volume of transactions that they process on behalf of the Company’s customers. Total revenue recognized from these contracts with these third parties was $5.0 million, $4.2 million and $4.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Through the Company’s wholly-owned subsidiary, REAS, the Company provides property appraisal services for negotiated fee amounts on a per appraisal basis. Total revenue recognized from these contracts with customers was $854,000, $828,000 and $692,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Through the Company’s wholly-owned subsidiary, CBRES, the Company provides appraisal management services. Total revenue recognized from these contracts with customers was $8.9 million, $6.8 million and $4.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Due to the nature of the Company’s relationship with its customers, the Company does not incur costs to obtain contracts and there are no material incremental costs to fulfill these contracts that should be capitalized. Disaggregation of Revenue A-42 transfer of service. Total revenue for the year ended December 31, 2021 derived from contracts in which services are transferred at a point in time was approximately $9.3 million. None of the Company’s revenue is derived from contracts in which services are transferred over time. Revenue is recognized as the services are provided to the customers. Economic factors, such as the financial stress impacting businesses and individuals as a result of the COVID-19 pandemic, could affect the nature, amount, and timing of these cash flows, as unfavorable economic conditions could impair a customers’ ability to provide payment for services. For the Company’s deposit contracts, this risk is mitigated as the Company generally deducts payments from customers’ accounts as services are rendered. For the Company’s appraisal services, the risk is mitigated in that the appraisal is not released until payment is received. Contract Balances Performance Obligations Significant Judgements
Organization	Organization Peoples Bancorp of North Carolina, Inc. (“Bancorp” or the “Company”) has served as the holding company to Peoples Bank (the “Bank”) since 1999. Bancorp is primarily regulated by the Board of Governors of the Federal Reserve System, and serves as the one-bank holding company for the Bank. The Bank commenced business in 1912 upon receipt of its banking charter from the North Carolina Commissioner of Banks (the “Commissioner”). The Bank is primarily regulated by the Commissioner and the Federal Deposit Insurance Corporation (the “FDIC”) and undergoes periodic examinations by these regulatory agencies. The Bank, whose main office is in Newton, North Carolina, provides a full range of commercial and consumer banking services primarily in Catawba, Alexander, Lincoln, Mecklenburg, Iredell and Wake counties in North Carolina. Peoples Investment Services, Inc. (“PIS”) is a wholly owned subsidiary of the Bank and began operations in 1996 to provide investment and trust services through agreements with an outside party. Real Estate Advisory Services, Inc. (“REAS”) is a wholly owned subsidiary of the Bank and began operations in 1997 to provide real estate appraisal and property management services to individuals and commercial customers of the Bank. Community Bank Real Estate Solutions, LLC (“CBRES”) is a wholly owned subsidiary of the Bank and began operations in 2009 as a “clearing house” for appraisal services for community banks. Other banks are able to contract with CBRES to find and engage appropriate appraisal companies. In 2019, the Company launched PB Insurance Agency, which is part of CBRES. PB Real Estate Holdings, LLC (“PBREH”) is a wholly owned subsidiary of the Bank and began operation in 2015. PBREH acquires, manages and disposes of real property, other collateral and other assets obtained in the ordinary course of collecting debts previously contracted. The Bank operates three banking offices focused on the Latino population that were formerly operated as a division of the Bank under the name Banco de la Gente (“Banco”). These offices, which offer the same banking services as our other branches offer, now operate under the same name as our other offices; however, we continue to separately categorize mortgage loans originated from these offices.
Basis of Presentation	The accounting principles followed by the Company, and the methods of applying these principles, conform with accounting principles generally accepted in the United States of America (“GAAP”) and with general practices in the banking industry. In preparing the financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ significantly from these estimates. Material estimates common to the banking industry that are particularly susceptible to significant change in the near term include, but are not limited to, the determination of the allowance for loan losses and valuation of real estate acquired in connection with or in lieu of foreclosure on loans.
Cash and Cash Equivalents	Cash, due from banks, interest-bearing deposits and federal funds sold are considered cash and cash equivalents for cash flow reporting purposes.
Investment Securities	The Company uses three classifications for its investment securities: trading, available for sale, or held to maturity. Trading securities are bought and held principally for sale in the near term. Held to maturity securities are those securities for which the Company has the ability and intent to hold until maturity. All other securities not included in trading or held to maturity are classified as available for sale. At December 31, 2021 and 2020, the Company classified all of its investment securities as available for sale. Available for sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, are excluded from earnings and are reported as a separate component of shareholders’ equity until realized. Management evaluates investment securities for other-than-temporary impairment on a quarterly basis. A decline in the market value of any investment below cost that is deemed other-than-temporary is charged to earnings for the decline in value deemed to be credit related and a new cost basis in the security is established. The decline in value attributed to non-credit related factors is recognized in comprehensive income. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to the yield. Realized gains and losses for securities classified as available for sale are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

1. Summary of Significant Acc_3

1. Summary of Significant Accounting Policies (Tables)	12 Months Ended
1. Summary of Significant Accounting Policies (Tables)	Dec. 31, 2021
1. Summary of Significant Accounting Policies
Schedule of premises and equipment	Buildings and improvements 10- 50 years Furniture and equipment 3 - 10 years
Reconciliations of the amounts used in the computation of both basic earnings per common share and diluted earnings per common share	For the year ended December 31, 2021 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 15,133 5,576,099 $ 2.71 Effect of dilutive securities: Restricted stock units - unvested - 13,935 Shares held in deferred comp plan 158,831 Diluted earnings per share $ 15,133 5,748,865 $ 2.63 For the year ended December 31, 2020 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 11,357 5,657,025 $ 2.01 Effect of dilutive securities: Restricted stock units - unvested - 14,203 Shares held in deferred comp plan - 150,394 Diluted earnings per share $ 11,357 5,821,622 $ 1.95

2. Investment Securities (Table

2. Investment Securities (Tables)	12 Months Ended
2. Investment Securities (Tables)	Dec. 31, 2021
2. Investment Securities
Investment securities available for sale	(Dollars in thousands) December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mortgage-backed securities $ 143,095 2,812 593 145,314 U.S. Government sponsored enterprises 7,384 331 208 7,507 State and political subdivisions 87,757 4,758 87 92,428 Total $ 238,236 7,901 888 245,249 (Dollars in thousands) December 31, 2021 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasuries $ 7,889 75 - - 7,889 75 U.S. Government sponsored enterprises 5,232 15 3,263 170 8,495 185 Mortgage-backed securities 131,483 2,477 19,632 542 151,115 3,019 State and political subdivisions 80,076 1,981 5,922 276 85,998 2,257 Total $ 224,680 4,548 28,817 988 253,497 5,536 (Dollars in thousands) December 31, 2020 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 80,827 565 4,762 28 85,589 593 U.S. Government sponsored enterprises - - 4,193 208 4,193 208 State and political subdivisions 7,126 87 - - 7,126 87 Total $ 87,953 652 8,955 236 96,908 888
Amortized cost and estimated fair value of investment securities available for sale by contractual maturity	December 31, 2021 (Dollars in thousands) Amortized Cost Fair Value Due within one year $ 8,051 8,081 Due from one to five years 11,759 12,274 Due from five to ten years 127,903 129,832 Due after ten years 40,307 39,210 Mortgage-backed securities 218,402 217,152 Total $ 406,422 406,549
Fair value measurements of investment securities available for sale using Level 3 significant unobservable inputs	(Dollars in thousands) December 31, 2021 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation U. S Treasuries $ 7,889 - 7,889 - U.S. Government sponsored enterprises $ 14,267 - 14,267 - Mortgage-backed securities $ 217,152 - 217,152 - State and political subdivisions $ 167,241 - 167,241 - (Dollars in thousands) December 31, 2020 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage-backed securities $ 145,314 - 145,314 - U.S. Government sponsored enterprises $ 7,507 - 7,507 - State and political subdivisions $ 92,428 - 92,428 -

3. Loans (Tables)

3. Loans (Tables)	12 Months Ended
3. Loans (Tables)	Dec. 31, 2021
3. Loans
Major classifications of loans	(Dollars in thousands) December 31, 2021 December 31, 2020 Real estate loans: Construction and land development $ 95,760 94,124 Single-family residential 266,111 272,325 Single-family residential - Banco de la Gente non-traditional 23,147 26,883 Commercial 337,841 332,971 Multifamily and farmland 58,366 48,880 Total real estate loans 781,225 775,183 Loans not secured by real estate: Commercial loans 91,172 161,740 Farm loans 796 855 Consumer loans 6,436 7,113 All other loans 5,240 3,748 Total loans 884,869 948,639 Less allowance for loan losses (9,355 ) (9,908 ) Total net loans $ 875,514 938,731
Age analysis of past due loans, by loan type	December 31, 2021 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ - - - 95,760 95,760 - Single-family residential 2,323 634 2,957 263,154 266,111 - Single-family residential - Banco de la Gente non-traditional 2,593 112 2,705 20,442 23,147 - Commercial 488 - 488 337,353 337,841 - Multifamily and farmland - - - 58,366 58,366 - Total real estate loans 5,404 746 6,150 775,075 781,225 - Loans not secured by real estate: Commercial loans 43 - 43 91,129 91,172 - Farm loans - - - 796 796 - Consumer loans 38 - 38 6,398 6,436 - All other loans - - - 5,240 5,240 - Total loans $ 5,485 746 6,231 878,638 884,869 - December 31, 2020 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 298 - 298 93,826 94,124 - Single-family residential 3,660 270 3,930 268,395 272,325 - Single-family residential - Banco de la Gente non-traditional 3,566 105 3,671 23,212 26,883 - Commercial 36 - 36 332,935 332,971 - Multifamily and farmland - - - 48,880 48,880 - Total real estate loans 7,560 375 7,935 767,248 775,183 - Loans not secured by real estate: Commercial loans - - - 161,740 161,740 - Farm loans - - - 855 855 - Consumer loans 45 2 47 7,066 7,113 - All other loans - - - 3,748 3,748 - Total loans $ 7,605 377 7,982 940,657 948,639 -
Non-accrual loans	(Dollars in thousands) December 31, 2021 December 31, 2020 Real estate loans: Construction and land development $ - - Single-family residential 1,642 1,266 Single-family residential - Banco de la Gente non-traditional 1,232 1,709 Commercial 200 440 Multifamily and farmland 105 117 Total real estate loans 3,179 3,532 Loans not secured by real estate: Commercial loans 49 212 Consumer loans 2 14 Total $ 3,230 3,758 December 31, 2021 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 73 - 73 73 3 82 6 Single-family residential 5,138 524 4,374 4,898 86 6,017 253 Single-family residential - Banco de la Gente non-traditional 11,753 - 10,922 10,922 687 10,325 609 Commercial 2,138 435 1,608 2,043 11 2,385 109 Multifamily and farmland 113 - 105 105 - 110 6 Total impaired real estate loans 19,215 959 17,082 18,041 787 18,919 983 Loans not secured by real estate: Commercial loans 282 49 170 219 2 271 19 Consumer loans 8 - 4 4 - 11 1 Total impaired loans $ 19,505 1,008 17,256 18,264 789 19,201 1,003 December 31, 2020 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 108 - 108 108 4 134 8 Single-family residential 5,302 379 4,466 4,845 33 4,741 262 Single-family residential - Banco de la Gente non-traditional 13,417 - 12,753 12,753 862 13,380 798 Commercial 2,999 1,082 1,891 2,973 14 2,940 139 Multifamily and farmland 119 - 117 117 - 29 6 Total impaired real estate loans 21,945 1,461 19,335 20,796 913 21,224 1,213 Loans not secured by real estate: Commercial loans 515 211 244 455 5 564 32 Consumer loans 41 - 37 37 1 60 5 Total impaired loans $ 22,501 1,672 19,616 21,288 919 21,848 1,250 December 31, 2019 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 183 - 183 183 7 231 12 Single-family residential 5,152 403 4,243 4,646 36 4,678 269 Single-family residential - Banco de la Gente non-traditional 15,165 - 14,371 14,371 944 14,925 956 Commercial 1,879 - 1,871 1,871 7 1,822 91 Total impaired real estate loans 22,379 403 20,668 21,071 994 21,656 1,328 Loans not secured by real estate: Commercial loans 180 92 84 176 - 134 9 Consumer loans 100 - 96 96 2 105 7 Total impaired loans $ 22,659 495 20,848 21,343 996 21,895 1,344
Fair value measurements for mortgage loans held for sale, impaired loans and other real estate on a non-recurring basis	(Dollars in thousands) Fair Value Measurements December 31, 2021 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 3,637 - - 3,637 Impaired loans $ 17,475 - - 17,475 (Dollars in thousands) Fair Value Measurements December 31, 2020 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 9,139 - - 9,139 Impaired loans $ 20,369 - - 20,369 Other real estate $ 128 - - 128 (Dollars in thousands) Fair Value December 31, 2021 Fair Value December 31, 2020 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Mortgage loans held for sale $ 3,637 $ 9,139 Rate lock commitment N/A N/A Impaired loans $ 17,475 $ 20,369 Appraised value and discounted cash flows Discounts to reflect current market conditions and ultimate collectability 0 - 25% Other real estate $ - $ 128 Appraised value Discounts to reflect current market conditions and estimated costs to sell 0 - 25%
Changes in the allowance for loan losses	(Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Twelve months ended December 31,2021 Allowance for loan losses: Beginning balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Charge-offs - (89 ) - - - (293 ) - (380 ) - (762 ) Recoveries 121 271 - 52 3 786 - 139 - 1,372 Provision (124 ) (12 ) (188 ) (30 ) 25 (1,127 ) - 223 70 (1,163 ) Ending balance $ 1,193 2,013 864 2,234 150 711 - 110 2,080 9,355 Allowance for loan losses December 31, 2021 Ending balance: individually evaluated for impairment $ 1 57 672 7 - - - - - 737 Ending balance: collectively evaluated for impairment 1,192 1,956 192 2,227 150 711 - 110 2,080 8,618 Ending balance $ 1,193 2,013 864 2,234 150 711 - 110 2,080 9,355 Loans at December 31, 2021 Ending balance $ 95,760 266,111 23,147 337,841 58,366 91,172 796 11,676 - 884,869 Ending balance: individually evaluated for impairment $ 6 1,633 9,795 1,437 - 49 - - - 12,920 Ending balance: collectively evaluated for impairment $ 95,754 264,478 13,352 336,404 58,366 91,123 796 11,676 - 871,949 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Twelve months ended December 31, 2020 Allowance for loan losses: Beginning balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Charge-offs (5 ) (65 ) - (7 ) - (903 ) - (434 ) - (1,414 ) Recoveries 36 70 - 70 - 34 - 173 - 383 Provision 471 564 (21 ) 844 2 1,526 - 251 622 4,259 Ending balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Allowance for loan losses December 31, 2020 Ending balance: individually evaluated for impairment $ 1 4 844 8 - - - - - 857 Ending balance: collectively evaluated for impairment 1,195 1,839 208 2,204 122 1,345 - 128 2,010 9,051 Ending balance $ 1,196 1,843 1,052 2,212 122 1,345 - 128 2,010 9,908 Loans at December 31, 2020 Ending balance $ 94,124 272,325 26,883 332,971 48,880 161,740 855 10,861 - 948,639 Ending balance: individually evaluated for impairment $ 7 1,558 11,353 2,118 - 212 - - - 15,248 Ending balance: collectively evaluated for impairment $ 94,117 270,767 15,530 330,853 48,880 161,528 855 10,861 - 933,391 (Dollars in thousands) December 31, 2019 Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Twelve months ended December 31, 2019 Allowance for loan losses: Beginning balance $ 813 1,325 1,177 1,278 83 626 - 161 982 6,445 Charge-offs (21 ) (42 ) - (1 ) - (389 ) - (623 ) - (1,076 ) Recoveries 45 66 - 49 - 83 - 205 - 448 Provision (143 ) (75 ) (104 ) (21 ) 37 368 - 395 406 863 Ending balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Allowance for loan losses December 31, 2019 Ending balance: individually evaluated for impairment $ 2 6 925 4 - - - - - 937 Ending balance: collectively evaluated for impairment 692 1,268 148 1,301 120 688 - 138 1,388 5,743 Ending balance $ 694 1,274 1,073 1,305 120 688 - 138 1,388 6,680 Loans at December 31, 2019 Ending balance $ 92,596 269,475 30,793 291,255 48,090 100,263 1,033 16,369 - 849,874 Ending balance: individually evaluated for impairment $ 10 1,697 12,899 1,365 - 92 - - - 16,063 Ending balance: collectively evaluated for impairment $ 92,586 267,778 17,894 289,890 48,090 100,171 1,033 16,369 - 833,811
Credit risk profile of each loan type based on internally assigned risk grade	December 31, 2021 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ - 5,923 - - - 371 - 581 - 6,875 2- High Quality 11,752 109,337 - 28,546 19 16,177 - 2,039 1,309 169,179 3- Good Quality 80,325 129,856 8,712 272,786 54,945 68,183 792 3,510 3,931 623,040 4- Management Attention 3,534 14,964 10,478 30,937 2,754 5,214 4 284 - 68,169 5- Watch 76 2,464 1,703 4,938 543 1,177 - 1 - 10,902 6- Substandard 73 3,567 2,254 634 105 50 - 21 - 6,704 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 95,760 266,111 23,147 337,841 58,366 91,172 796 6,436 5,240 884,869 December 31, 2020 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 228 9,867 - - - 406 - 678 - 11,179 2- High Quality 9,092 121,331 - 40,569 22 19,187 - 2,237 1,563 194,001 3- Good Quality 76,897 115,109 10,170 241,273 44,890 128,727 832 3,826 1,477 623,201 4- Management Attention 4,917 20,012 12,312 39,370 3,274 11,571 23 336 708 92,523 5- Watch 2,906 2,947 1,901 10,871 694 1,583 - 6 - 20,908 6- Substandard 84 3,059 2,500 888 - 266 - 30 - 6,827 7- Doubtful - - - - - - - - - - 8- Loss - - - - - - - - - - Total $ 94,124 272,325 26,883 332,971 48,880 161,740 855 7,113 3,748 948,639

4. Premises and Equipment (Tabl

4. Premises and Equipment (Tables)	12 Months Ended
4. Premises and Equipment (Tables)	Dec. 31, 2021
4. Premises and Equipment
Summary of premises and equipment	(Dollars in thousands) 2021 2020 Land $ 3,857 3,970 Buildings and improvements 18,359 18,804 Furniture and equipment 25,420 26,565 Construction in process - 10 Total premises and equipment 47,636 49,349 Less accumulated depreciation (31,532 ) (30,749 ) Total net premises and equipment $ 16,104 18,600

5. Leases (Tables)

5. Leases (Tables)	12 Months Ended
5. Leases (Tables)	Dec. 31, 2021
5. Leases
Lease expense	(Dollars in thousands) December 31, 2021 Operating lease cost $ 737 Other information: Cash paid for amounts included in the measurement of lease liabilities 717 Operating cash flows from operating leases - Right-of-use assets obtained in exchange for new lease liabilities - operating leases 1,927 Weighted-average remaining lease term - operating leases 8.02 Weighted-average discount rate - operating leases 2.39 %
Maturity analysis of operating lease liabilities	(Dollars in thousands) Maturity Analysis of Operating Lease Liabilities: December 31, 2021 2022 $ 740 2023 746 2024 691 2025 635 2026 518 Thereafter 1,838 Total 5,168 Less: Imputed Interest (491 ) Operating Lease Liability $ 4,677

6. Time Deposits (Tables)

6. Time Deposits (Tables)	12 Months Ended
6. Time Deposits (Tables)	Dec. 31, 2021
6. Time Deposits
Scheduled maturities of time deposits	(Dollars in thousands) 2022 $ 51,615 2023 21,461 2024 20,663 2025 3,822 2026 and thereafter 3,689 Total $ 101,250

9. Income Taxes (Tables)

9. Income Taxes (Tables)	12 Months Ended
9. Income Taxes (Tables)	Dec. 31, 2021
9. Income Taxes
Components of income tax expense (benefit)	(Dollars in thousands) 2021 2020 2019 Current expense $ 4,079 3,049 2,972 Deferred income tax expense (283 ) (560 ) 164 Total income tax $ 3,796 2,489 3,136
Schedule of effective income Tax rate reconciliation	(Dollars in thousands) 2021 2020 2019 Tax expense at statutory rate $ 3,975 2,908 3,613 State income tax, net of federal income tax effect 339 261 351 Tax-exempt interest income (497 ) (649 ) (802 ) Increase in cash surrender value of life insurance (83 ) (80 ) (81 ) Tax credits (234 ) (234 ) - Nondeductible interest and other expense 30 46 40 Other 266 237 15 Total $ 3,796 2,489 3,136
Schedule of deferred tax assets and liabilities	(Dollars in thousands) 2021 2020 Deferred tax assets: Allowance for loan losses $ 2,149 2,276 Accrued retirement expense 1,148 1,190 Restricted stock 209 190 Interest income on nonaccrual loans 2 1 Lease liability 1,075 798 Total gross deferred tax assets 4,583 4,455 Deferred tax liabilities: Deferred loan fees 263 284 Accumulated depreciation 563 873 Prepaid expenses 4 5 ROU Asset 1,060 787 Other (55 ) 41 Unrealized gain on available for sale securities 29 1,611 Total gross deferred tax liabilities 1,864 3,601 Net deferred tax asset $ 2,719 854

10. Related Party Transactions

10. Related Party Transactions (Tables)	12 Months Ended
10. Related Party Transactions (Tables)	Dec. 31, 2021
10. Related Party Transactions
Summary of activity for related party loans	(Dollars in thousands) 2021 2020 Beginning balance $ 1,852 3,472 New loans 3,636 4,189 Repayments (2,801 ) (5,809 ) Ending balance $ 2,687 1,852

11. Commitments and Contingen_2

11. Commitments and Contingencies (Tables)	12 Months Ended
11. Commitments and Contingencies (Tables)	Dec. 31, 2021
11. Commitments and Contingencies
Financial instruments with credit risk	(Dollars in thousands) Contractual Amount 2021 2020 Financial instruments whose contract amount represent credit risk: Commitments to extend credit $ 304,258 299,039 Standby letters of credit $ 4,892 4,745

12. Employee and Director Ben_2

12. Employee and Director Benefit Programs (Tables)	12 Months Ended
12. Employee and Director Benefit Programs (Tables)	Dec. 31, 2021
12. Employee and Director Benefit Programs
Change in accumulated benefit obligation	(Dollars in thousands) 2021 2020 Benefit obligation at beginning of period $ 4,870 4,700 Service cost 359 323 Interest cost 70 63 Benefits paid (288 ) (216 ) Benefit obligation at end of period $ 5,011 4,870
Amounts recognized in the Consolidated Balance Sheet	(Dollars in thousands) 2021 2020 Benefit obligation $ 5,011 4,870 Fair value of plan assets - - (Dollars in thousands) 2021 2020 Funded status $ (5,011 ) (4,870 ) Unrecognized prior service cost/benefit - - Unrecognized net actuarial loss - - Net amount recognized $ (5,011 ) (4,870 ) Unfunded accrued liability $ (5,011 ) (4,870 ) Intangible assets - - Net amount recognized $ (5,011 ) (4,870 )
Schedule of net benefit costs	(Dollars in thousands) 2021 2020 2019 Service cost $ 359 323 299 Interest cost 70 63 58 Net periodic cost $ 429 386 357 Weighted average discount rate assumption used to determine benefit obligation 5.50 % 5.49 % 5.49 %
Schedule of expected benefit payments	(Dollars in thousands) Year ending December 31, 2022 $ 327 2023 $ 348 2024 $ 360 2025 $ 376 2026 $ 375 Thereafter $ 8,795

13. Regulatory Matters (Tables)

13. Regulatory Matters (Tables)	12 Months Ended
13. Regulatory Matters (Tables)	Dec. 31, 2021
13. Regulatory Matters
Bank's actual capital amounts and ratios	(Dollars in thousands) Actual Minimum Regulatory Capital Ratio Minimum Ratio plus Capital Conservation Buffer Amount Ratio Amount Ratio Amount Ratio As of December 31, 2021: Total Capital (to Risk-Weighted Assets) Consolidated $ 166,628 16.35 % 81,547 8.00 % N/A N/A Bank $ 164,975 16.19 % 81,539 8.00 % 107,020 10.50 % Tier 1 Capital (to Risk-Weighted Assets) Consolidated $ 157,273 15.43 % 61,160 6.00 % N/A N/A Bank $ 155,620 15.27 % 61,154 6.00 % 86,635 8.50 % Tier 1 Capital (to Average Assets) Consolidated $ 157,273 9.64 % 65,258 4.00 % N/A N/A Bank $ 155,620 9.50 % 65,557 4.00 % 65,557 4.00 % Common Equity Tier 1 (to Risk-Weighted Assets) Consolidated $ 142,273 13.96 % 45,870 4.50 % N/A N/A Bank $ 155,620 15.27 % 45,866 4.50 % 71,347 7.00 % (Dollars in thousands) Actual Minimum Regulatory Capital Ratio Minimum Ratio plus Capital Conservation Buffer Amount Ratio Amount Ratio Amount Ratio As of December 31, 2020: Total Capital (to Risk-Weighted Assets) Consolidated $ 159,407 16.07 % 79,372 8.00 % N/A N/A Bank $ 157,106 15.85 % 79,283 8.00 % 104,059 10.50 % Tier 1 Capital (to Risk-Weighted Assets) Consolidated $ 149,499 15.07 % 59,529 6.00 % N/A N/A Bank $ 147,198 14.85 % 59,462 6.00 % 84,238 8.50 % Tier 1 Capital (to Average Assets) Consolidated $ 149,499 10.24 % 58,378 4.00 % N/A N/A Bank $ 147,198 10.04 % 58,662 4.00 % 58,662 4.00 % Common Equity Tier 1 (to Risk-Weighted Assets) Consolidated $ 134,499 13.56 % 44,647 4.50 % N/A N/A Bank $ 147,198 14.85 % 44,597 4.50 % 69,373 7.00 %

15. Other Operating Income an_2

15. Other Operating Income and Expense (Tables)	12 Months Ended
15. Other Operating Income and Expense (Tables)	Dec. 31, 2021
15. Other Operating Income and Expense
Other operating income and expense	(Dollars in thousands) 2021 2020 2019 Visa debit card income $ 5,045 4,237 4,145 Bank owned life insurance income 397 380 383 Gain (loss) on sale of premises and equipment 105 - (239 ) Other 2,092 1,315 1,559 $ 7,639 5,932 5,848 (Dollars in thousands) 2021 2020 2019 ATM expense $ 619 567 579 Data processing 643 635 616 Deposit program expense 415 426 515 Dues and subscriptions 588 538 421 FHLB advance prepayment penalty - 1,100 - Internet banking expense 768 729 681 Office supplies 374 538 467 Telephone 730 794 802 Other 3,737 3,217 3,893 $ 7,874 8,544 7,974

16. Fair Value of Financial I_2

16. Fair Value of Financial Instruments (Tables)	12 Months Ended
16. Fair Value of Financial Instruments (Tables)	Dec. 31, 2021
16. Fair Value of Financial Instruments
Carrying amount and estimated fair value of the Company's financial instruments	(Dollars in thousands) Fair Value Measurements at December 31, 2021 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 277,499 277,499 - - 277,499 Investment securities available for sale 406,549 - 406,549 - 406,549 Other investments 3,668 - - 3,668 3,668 Mortgage loans held for sale 3,637 - - 3,637 3,637 Loans, net 875,514 - - 855,814 855,814 Mutual funds held in deferred compensation trust 1,510 - 1,510 - 1,510 Liabilities: Deposits $ 1,412,748 - - 1,401,833 1,401,833 Securities sold under agreements to repurchase 37,094 - 37,094 - 37,094 Junior subordinated debentures 15,464 - 15,464 - 15,464 (Dollars in thousands) Fair Value Measurements at December 31, 2020 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 161,580 161,580 - - 161,580 Investment securities available for sale 245,249 - 245,249 - 245,249 Other investments 4,155 - - 4,155 4,155 Mortgage loans held for sale 9,139 - - 9,139 9,139 Loans, net 938,731 - - 924,845 924,845 Mutual funds held in deferred compensation trust 1,320 - 1,320 - 1,320 Liabilities: Deposits $ 1,221,086 - - 1,216,503 1,216,503 Securities sold under agreements to repurchase 26,201 - 26,201 - 26,201 Junior subordinated debentures 15,464 - 15,464 - 15,464

17. Peoples Bancorp of North Ca

17. Peoples Bancorp of North Carolina, Inc. (Parent Company Only) Condensed Financial Statements (Tables)	12 Months Ended
	Dec. 31, 2021
Peoples Bancorp of North Carolina, Inc. (Parent Company Only) Condensed Financial Statements
Balance Sheets	Assets 2021 2020 Cash $ 561 664 Interest-bearing time deposit 1,000 1,000 Investment in subsidiaries 155,716 152,598 Investment in PEBK Capital Trust II 464 464 Other assets 105 650 Total assets $ 157,846 155,376 Liabilities and Shareholders' Equity Junior subordinated debentures $ 15,464 15,464 Liabilities 13 13 Shareholders' equity 142,369 139,899 Total liabilities and shareholders' equity $ 157,846 155,376
Statements of Earnings	Revenues: 2021 2020 2019 Interest and dividend from subsidiary $ 7,419 7,539 12,850 Total revenues 7,419 7,539 12,850 Expenses: Interest 280 370 844 Other operating expenses 613 625 629 Total expenses 893 995 1,473 Income before income tax benefit and equity in undistributed earnings of subsidiaries 6,526 6,544 11,377 Income tax benefit 185 201 299 Income before equity in undistributed earnings of subsidiaries 6,711 6,745 11,676 Equity in undistributed earnings of subsidiaries 8,422 4,612 2,391 Net earnings $ 15,133 11,357 14,067
Statements of Cash Flows	Statements of Cash Flows For the Years Ended December 31, 2021, 2020 and 2019 (Dollars in thousands) 2021 2020 2019 Cash flows from operating activities: Net earnings $ 15,133 11,357 14,067 Adjustments to reconcile net earnings to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (8,422 ) (4,612 ) (2,391 ) Change in: Other assets 545 (19 ) 57 Other liabilities - (10 ) (13 ) Net cash provided by operating activities 7,256 6,716 11,720 Cash flows from investing activities: Proceeds from calls and maturities of investment securities available for sale - 250 - Net cash provided by investing activities - 250 - Cash flows from financing activities: Repayment of junior subordinated debentures - (155 ) (5,000 ) Cash dividends paid on common stock (3,793 ) (4,392 ) (3,939 ) Stock repurchase (3,605 ) (2,999 ) (2,490 ) Proceeds from exercise of restricted stock units 39 57 207 Net cash used by financing activities (7,359 ) (7,489 ) (11,222 ) Net change in cash (103 ) (523 ) 498 Cash at beginning of year 664 1,187 689 Cash at end of year $ 561 664 1,187

18. Quarterly Data (Tables)

18. Quarterly Data (Tables)	12 Months Ended
18. Quarterly Data (Tables)	Dec. 31, 2021
18. Quarterly Data
Schedule of quarterly financial information	2021 2020 (Dollars in thousands, except per share amounts) First Second Third Fourth First Second Third Fourth Total interest income $ 11,922 12,517 11,421 11,319 $ 12,250 11,638 11,868 12,202 Total interest expense 815 842 861 687 1,041 912 942 941 Net interest income 11,107 11,675 10,560 10,632 11,209 10,726 10,926 11,261 Provision for loan losses (455 ) (226 ) (182 ) (300 ) 1,521 1,417 522 799 Other income 5,873 6,040 6,040 6,966 4,595 5,239 7,132 5,948 Other expense 12,268 12,132 12,568 14,159 11,449 11,452 11,914 14,116 Income before income taxes 5,167 5,809 4,214 3,739 2,834 3,096 5,622 2,294 Income tax expense 1,046 1,194 824 732 467 535 1,113 374 Net earnings 4,121 4,615 3,390 3,007 2,367 2,561 4,509 1,920 Basic net earnings per share $ 0.73 0.82 0.61 0.55 $ 0.41 0.46 0.80 0.34 Diluted net earnings per share $ 0.71 0.80 0.59 0.53 $ 0.40 0.44 0.78 0.33

Summary of Significant Accounti

Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net Earnings Available to Common Shareholders
Net earnings									$ 15,133	$ 11,357	$ 14,067
Effect of dilutive securities: Restricted stock units									0	0	0
Diluted earnings per common share									$ 15,133	$ 11,357	$ 14,067
Common Shares
Basic earnings per common share (in shares)									5,576,099	5,657,025	5,799,505
Effect of dilutive securities: Restricted stock units (in shares)									13,935	14,203	25,438
Shares held in deferred comp plan									158,831	150,394	141,542
Diluted earnings per common share (in shares)									5,748,865	5,821,622	5,966,485
Per Share Amount
Basic earnings per common share (in dollars per share)	$ 0.55	$ 0.61	$ 0.82	$ 0.73	$ 0.34	$ 0.80	$ 0.46	$ 0.41	$ 2.71	$ 2.01	$ 2.43
Diluted earnings per common share (in dollars per share)	$ 0.53	$ 0.59	$ 0.80	$ 0.71	$ 0.33	$ 0.78	$ 0.44	$ 0.40	$ 2.63	$ 1.95	$ 2.36

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Unpaid principal balances of mortgage loans serviced for others	$ 351,000				$ 578,000				$ 351,000	$ 578,000	$ 729,000
Asset and corresponding liability					$ 1,300,000					$ 1,300,000
Basic earnings per share	$ 0.55	$ 0.61	$ 0.82	$ 0.73	$ 0.34	$ 0.80	$ 0.46	$ 0.41	$ 2.71	$ 2.01	$ 2.43
Compensation expense for restricted stock units									$ 181,000	$ 27,000	$ 270,000
Building Improvements \| Minimum
Estimated useful lives									10
Building Improvements \| Maximum
Estimated useful lives									50
Furniture and equipment \| Minimum
Estimated useful lives									3
Furniture and equipment \| Maximum
Estimated useful lives									10

Investment Securities (Details)

Investment Securities (Details) - USD ($)	12 Months Ended
Investment Securities (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Amortized cost	$ 406,422,000	$ 238,236,000
Gross unrealized gains		7,901,000
Gross unrealized losses	5,536,000	888,000
Estimated fair value	406,549,000	245,249,000
U.S Treasuries [Member]
Gross unrealized gains	0
Gross unrealized losses	75,000
Estimated fair value	7,889,000	0
U.S. Government sponsored enterprises
Amortized cost		7,384,000
Gross unrealized gains	200,000	331,000
Gross unrealized losses	185,000	208,000
Estimated fair value	14,267,000	7,507,000
Mortgage-backed securities
Amortized cost	218,402,000	143,095,000
Gross unrealized gains		2,812,000
Gross unrealized losses	3,019,000	593,000
Estimated fair value	217,152,000	145,314,000
State and political subdivisions
Amortized cost		87,757,000
Gross unrealized gains	3,694,000	4,758,000
Gross unrealized losses	2,257,000	87,000
Estimated fair value	$ 167,241,000	$ 92,428,000

Investment Securities (Details

Investment Securities (Details 1) - USD ($) $ in Thousands	12 Months Ended
Investment Securities (Details 1) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Less than 12 months, fair value	$ 224,680	$ 87,953
Less than 12 months, unrealized losses	4,548	652
12 months or more, fair value	28,817	8,955
12 months or more, unrealized losses	988	236
Total, fair value	253,497	96,908
Total, unrealized losses	5,536	888
U.S. Government sponsored enterprises
Less than 12 months, fair value	5,232	0
Less than 12 months, unrealized losses	15	0
12 months or more, fair value	3,263	4,193
12 months or more, unrealized losses	170	208
Total, fair value	8,495	4,193
Total, unrealized losses	185	208
Mortgage-backed securities
Less than 12 months, fair value	131,483	80,827
Less than 12 months, unrealized losses	2,477	565
12 months or more, fair value	19,632	4,762
12 months or more, unrealized losses	542	28
Total, fair value	151,115	85,589
Total, unrealized losses	3,019	593
State and political subdivisions
Less than 12 months, fair value	80,076	7,126
Less than 12 months, unrealized losses	1,981	87
12 months or more, fair value	5,922	0
12 months or more, unrealized losses	276	0
Total, fair value	85,998	7,126
Total, unrealized losses	$ 2,257	$ 87

Investment Securities (Detail_2

Investment Securities (Details 2) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Amortized Cost
Due within one year	$ 8,051,000
Due from one to five years	11,759,000
Due from five to ten years	127,903,000
Due after ten years	40,307,000
Mortgage-backed securities	218,402,000
Total	406,422,000	$ 238,236,000
Estimated Fair Value
Due within one year	8,081,000
Due from one to five years	12,274,000
Due from five to ten years	129,832,000
Due after ten years	39,210,000
Mortgage-backed securities	217,152,000
Total	$ 406,549,000

Investment Securities (Detail_3

Investment Securities (Details 3) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Estimated fair value	$ 406,549,000	$ 245,249,000
U.S. Government sponsored enterprises
Level 1 valuation	0	0
Level 2 valuation	14,267,000	7,507,000
Level 3 valuation	0	0
Estimated fair value	14,267,000	7,507,000
Mortgage-backed securities
Level 1 valuation	0	0
Level 2 valuation	217,152,000	145,314,000
Level 3 valuation	0	0
Estimated fair value	217,152,000	145,314,000
State and political subdivisions
Level 1 valuation	0	0
Level 2 valuation	167,241,000	92,428,000
Level 3 valuation	0	0
Estimated fair value	167,241,000	92,428,000
U.S Treasuries [Member]
Level 1 valuation	0	0
Level 2 valuation	7,889,000	0
Level 3 valuation	0	0
Estimated fair value	$ 7,889,000	$ 0

Investment Securities (Detail_4

Investment Securities (Details Narrative) - USD ($)	12 Months Ended
Investment Securities (Details Narrative) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021
2. Investment Securities
Unrealized losses in the investment securites portfolio relating to debt securities			$ 5,500,000
Proceeds from sales of investment securities available for sale	$ 56,300,000	$ 20,700,000
Gross losses	56,000	4,000
Gains on sales of available for sale securities	2,700,000	$ 230,000
Securities pledged to secure public deposits	$ 77,300,000		$ 98,600,000

Loans (Details)

Loans (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Major Classifications
Total loans	$ 884,869,000	$ 948,639,000
Less allowance for loan losses	9,355,000	9,908,000
Net loans	875,514,000	938,731,000
Good Quality
Major Classifications
Total loans	623,040,000	623,201,000
Commercial loans (not secured by real estate)
Major Classifications
Total loans	91,172,000	161,740,000
Consumer loans (not secured by real estate)
Major Classifications
Total loans	6,436,000	7,113,000
Total Real Estate Loan
Major Classifications
Total loans	781,225,000	775,183,000
Single-family residential
Major Classifications
Total loans	266,111,000	272,325,000
Commercial
Major Classifications
Total loans	337,841,000	332,971,000
Construction and Land Development
Major Classifications
Total loans	95,760,000	94,124,000
Construction and Land Development \| Good Quality
Major Classifications
Total loans	80,325,000	76,897,000
Single-Family Residential - Banco de la Gente Non-Tradtional
Major Classifications
Total loans	23,147,000	26,883,000
Single-Family Residential - Banco de la Gente Non-Tradtional \| Good Quality
Major Classifications
Total loans	8,712,000	10,170,000
Multifamily and Farmland
Major Classifications
Total loans	58,366,000	48,880,000
Multifamily and Farmland \| Good Quality
Major Classifications
Total loans	54,945	44,890,000
Farm Loans (Not Secured by Real Estate)
Major Classifications
Total loans	796,000	855,000
Farm Loans (Not Secured by Real Estate) \| Good Quality
Major Classifications
Total loans	792,000	832,000
All Other Loans (Not Secured by Real Estate)
Major Classifications
Total loans	5,240,000	3,748,000
All Other Loans (Not Secured by Real Estate) \| Good Quality
Major Classifications
Total loans	$ 3,931,000	$ 1,477,000

Loans (Details 1)

Loans (Details 1) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Total loans	$ 884,869,000	$ 948,639,000
Past Due Loans [Member]
Total loans	884,869,000	948,639,000
Loans 30-89 days past due	5,485,000	7,605,000
Loans 90 or more days past due	746,000	377,000
Total past due loans	6,231,000	7,982,000
Total current loans	878,638	940,657
Accruing loans 90 or more days past due	0	0
Commercial loans (not secured by real estate)
Total loans	91,172,000	161,740,000
Loans 30-89 days past due	43,000	0
Loans 90 or more days past due	0	0
Total past due loans	43,000	0
Total current loans	91,129	161,740
Accruing loans 90 or more days past due	0	0
Consumer loans (not secured by real estate)
Total loans	6,436,000	7,113,000
Loans 30-89 days past due	38,000	45,000
Loans 90 or more days past due	0	2,000
Total past due loans	38,000	47,000
Total current loans	6,398	7,066
Accruing loans 90 or more days past due	0	0
Total Real Estate Loan
Total loans	781,225,000	775,183,000
Loans 30-89 days past due	5,404,000	7,560,000
Loans 90 or more days past due	746,000	375,000
Total past due loans	6,150,000	7,935,000
Total current loans	775,075	767,248
Accruing loans 90 or more days past due	0	0
Single-family residential
Total loans	266,111,000	272,325,000
Loans 30-89 days past due	2,323,000	3,660,000
Loans 90 or more days past due	634,000	270,000
Total past due loans	2,957,000	3,930,000
Total current loans	263,154	268,395
Accruing loans 90 or more days past due	0	0
Commercial
Total loans	337,841,000	332,971,000
Loans 30-89 days past due	488,000	36,000
Loans 90 or more days past due	0	0
Total past due loans	488,000	36,000
Total current loans	337,353	332,935
Accruing loans 90 or more days past due	0	0
Construction and Land Development
Total loans	95,760,000	94,124,000
Loans 30-89 days past due	0	298,000
Loans 90 or more days past due	0	0
Total past due loans	0	298,000
Total current loans	95,760	93,826
Accruing loans 90 or more days past due	0	0
Single-Family Residential - Banco de la Gente Non-Tradtional
Total loans	23,147,000	26,883,000
Loans 30-89 days past due	2,593,000	3,566,000
Loans 90 or more days past due	112,000	105,000
Total past due loans	2,705,000	3,671,000
Total current loans	20,442	23,212
Accruing loans 90 or more days past due	0	0
Multifamily and Farmland
Total loans	58,366,000	48,880,000
Loans 30-89 days past due	0	0
Loans 90 or more days past due	0	0
Total past due loans	0	0
Total current loans	58,366	48,880
Accruing loans 90 or more days past due	0	0
Farm Loans (Not Secured by Real Estate)
Total loans	796,000	855,000
Loans 30-89 days past due	0	0
Loans 90 or more days past due	0	0
Total past due loans	0	0
Total current loans	796	855
Accruing loans 90 or more days past due	0	0
All Other Loans (Not Secured by Real Estate)
Total loans	5,240,000	3,748,000
Loans 30-89 days past due	0	0
Loans 90 or more days past due	0	0
Total past due loans	0	0
Total current loans	5,240	3,748
Accruing loans 90 or more days past due	$ 0	$ 0

Loans (Details 2)

Loans (Details 2) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Non-Accrual Loans
Non-accrual loans	$ 3,230	$ 3,758
Commercial loans (not secured by real estate)
Non-Accrual Loans
Non-accrual loans	49	212
Consumer loans (not secured by real estate)
Non-Accrual Loans
Non-accrual loans	2	14
Total Real Estate Loan
Non-Accrual Loans
Non-accrual loans	3,179	3,532
Single-Family Residential - Banco de la Gente Non-Tradtional
Non-Accrual Loans
Non-accrual loans	1,232	1,709
Multifamily and Farmland
Non-Accrual Loans
Non-accrual loans	105	117
Single-family residential
Non-Accrual Loans
Non-accrual loans	1,642	1,266
Commercial
Non-Accrual Loans
Non-accrual loans	$ 200	$ 440

Loans (Details 3)

Loans (Details 3) - USD ($)	12 Months Ended
Loans (Details 3) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Impaired Loans
Unpaid contractual principal balance	$ 19,505,000	$ 22,501,000	$ 22,659,000
Recorded investment with no allowance	1,008,000	1,672,000	495,000
Recorded investment with allowance	17,256,000	19,616,000	20,848,000
Recorded investment in impaired loans	18,264,000	21,288,000	21,343,000
Related allowance	789,000	9,908,000	996,000
Average outstanding impaired loans	19,201,000	21,848,000	21,895,000
Interest income recognized	1,003,000	1,250,000	1,344,000
Commercial loans (not secured by real estate)
Impaired Loans
Unpaid contractual principal balance	282,000	515,000	180,000
Recorded investment with no allowance	49,000	211,000	92,000
Recorded investment with allowance	170,000	244,000	84,000
Recorded investment in impaired loans	219,000	455,000	176,000
Related allowance	2,000	5,000	0
Average outstanding impaired loans	271,000	564,000	134,000
Interest income recognized	19,000	32,000	9,000
Consumer loans (not secured by real estate)
Impaired Loans
Unpaid contractual principal balance	8,000	41,000	100,000
Recorded investment with no allowance	0	0	0
Recorded investment with allowance	4,000	37,000	96,000
Recorded investment in impaired loans	4,000	37,000	96,000
Related allowance	0	1,000	2
Average outstanding impaired loans	11,000	60,000	105,000
Interest income recognized	1,000	5,000	7,000
Total Real Estate Loan
Impaired Loans
Unpaid contractual principal balance	19,215,000	21,945,000	22,379,000
Recorded investment with no allowance	959,000	1,461,000	403,000
Recorded investment with allowance	17,082,000	19,335,000	20,668,000
Recorded investment in impaired loans	18,041,000	20,796,000	21,071,000
Related allowance	787,000	913,000	994,000
Average outstanding impaired loans	18,919,000	21,224,000	21,656,000
Interest income recognized	983,000	1,213,000	1,328,000
Single-family residential
Impaired Loans
Unpaid contractual principal balance	5,138,000	5,302,000	5,152,000
Recorded investment with no allowance	524,000	379,000	403,000
Recorded investment with allowance	4,374,000	4,466,000	4,243,000
Recorded investment in impaired loans	4,898,000	4,845,000	4,646,000
Related allowance	86,000	33,000	36,000
Average outstanding impaired loans	6,017,000	4,741,000	4,678,000
Interest income recognized	253,000	262,000	269,000
Commercial
Impaired Loans
Unpaid contractual principal balance	2,138,000	2,999,000	1,879,000
Recorded investment with no allowance	435,000	1,082,000	0
Recorded investment with allowance	1,608,000	1,891,000	1,871,000
Recorded investment in impaired loans	2,043,000	2,973,000	1,871,000
Related allowance	11,000	14,000	7,000
Average outstanding impaired loans	2,385,000	2,940,000	1,822,000
Interest income recognized	109,000	139,000	91,000
Construction and Land Development
Impaired Loans
Unpaid contractual principal balance	73,000	108,000	183,000
Recorded investment with no allowance	0	0	0
Recorded investment with allowance	73,000	108,000	183,000
Recorded investment in impaired loans	73,000	108,000	183,000
Related allowance	3,000	4,000	7,000
Average outstanding impaired loans	82,000	134,000	231,000
Interest income recognized	6,000	8,000	12,000
Single-Family Residential - Banco de la Gente Non-Tradtional
Impaired Loans
Unpaid contractual principal balance	11,753,000	13,417,000	15,165,000
Recorded investment with no allowance	0	0	0
Recorded investment with allowance	10,922,000	12,753,000	14,371,000
Recorded investment in impaired loans	10,922,000	12,753,000	14,371,000
Related allowance	687,000	862,000	944,000
Average outstanding impaired loans	10,325,000	13,380,000	14,925,000
Interest income recognized	609,000	798,000	$ 956,000
Multifamily and Farmland
Impaired Loans
Unpaid contractual principal balance	113,000	119,000
Recorded investment with no allowance	0	0
Recorded investment with allowance	105,000	117,000
Recorded investment in impaired loans	105,000	117,000
Related allowance	0	0
Average outstanding impaired loans	110,000	29,000
Interest income recognized	$ 6,000	$ 6,000

3 Loans (Details 4)

3 Loans (Details 4) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Mortgage loans held for sale	$ 3,637,000	$ 9,139,000
Impaired loans	17,475,000	20,369,000
Other real estate	0	128,000
Level 1
Mortgage loans held for sale	0	0
Impaired loans	0	0
Other real estate	0	0
Level 2
Mortgage loans held for sale	0	0
Impaired loans	0	0
Other real estate	0	0
Level 3
Mortgage loans held for sale	3,637,000	9,139,000
Impaired loans	17,475,000	20,369,000
Other real estate	$ 0	$ 128,000

3 Loans (Details 5)

3 Loans (Details 5) - USD ($)	12 Months Ended
3 Loans (Details 5) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Mortgage loans held for sale	$ 3,637,000	$ 9,139,000
Impaired loans	17,475,000	20,369,000
Other real estate	$ 0	$ 128,000
Mortgage loans held for sale
Valuation Technique	Rate lock commitment
Significant unobservable inputs	N/A
Impaired Loans
Valuation Technique	Appraised value and discounted cash flows
Significant unobservable inputs	Discounts to reflect current market conditions and ultimate collectability
Impaired Loans \| Minimum
Significant unobservable input value range	0.00%
Impaired Loans \| Maximum
Significant unobservable input value range	25.00%
Other real estate
Valuation Technique	Appraised value
Significant unobservable inputs	Discounts to reflect current market conditions and estimated costs to sell
Other real estate \| Minimum
Significant unobservable input value range	0.00%
Other real estate \| Maximum
Significant unobservable input value range	25.00%

Loans (Details 6)

Loans (Details 6) - USD ($)	12 Months Ended
Loans (Details 6) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Allowance for Loan Losses
Beginning balance	$ 9,908,000	$ 6,680,000	$ 6,445,000
Charge-offs	(542,000)	(1,414,000)	(1,076,000)
Recoveries		383,000	448,000
Provision	(863,000)	4,259,000	863,000
Ending balance		9,908,000	6,680,000
Allowance for loan losses, Ending balance: individually evaluated for impairments		857,000	937,000
Allowance for loan losses, Ending balance: collectively evaluated for impairments		9,051,000	5,743,000
Allowance for loan losses, Ending balance		9,908,000	6,680,000
Loans, Ending balance: individually evaluated for impairments		15,248,000	16,063,000
Loans, Ending balance: collectively evaluated for impairments		933,391,000	833,811,000
Loans, Ending balance		948,639,000	849,874,000
Consumer And All Other Loans
Allowance for Loan Losses
Beginning balance	128,000	138,000	161,000
Charge-offs	(380,000)	(434,000)	(623,000)
Recoveries	139,000	173,000	205,000
Provision	223,000	151,000	395,000
Ending balance	110,000	128,000	138,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	0	0	0
Allowance for loan losses, Ending balance: collectively evaluated for impairments	110,000	128,000	138,000
Allowance for loan losses, Ending balance	110,000	128,000	138,000
Loans, Ending balance: individually evaluated for impairments	0	0	0
Loans, Ending balance: collectively evaluated for impairments	11,676,000	10,861,000	16,369,000
Loans, Ending balance	11,676,000	10,861,000	16,369,000
Unallocated
Allowance for Loan Losses
Beginning balance	2,010,000	1,388,000	982,000
Charge-offs	0	0	0
Recoveries	0	0	0
Provision	70,000	622,000	406,000
Ending balance	2,080,000	2,010,000	1,388,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	0	0	0
Allowance for loan losses, Ending balance: collectively evaluated for impairments	2,080,000	2,010,000	1,388,000
Allowance for loan losses, Ending balance	2,080,000	2,010,000	1,388,000
Loans, Ending balance: individually evaluated for impairments	0	0	0
Loans, Ending balance: collectively evaluated for impairments	0	0	0
Loans, Ending balance	0	0	0
Commercial loans (not secured by real estate)
Allowance for Loan Losses
Beginning balance	1,345,000	688,000	626,000
Charge-offs	(293,000)	(903,000)	(389,000)
Recoveries	786,000	34,000	83,000
Provision	(1,127,000)	1,526,000	368,000
Ending balance	711,000	1,345,000	688,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	0	0	0
Allowance for loan losses, Ending balance: collectively evaluated for impairments	711,000	1,345,000	688,000
Allowance for loan losses, Ending balance	711,000	1,345,000	688,000
Loans, Ending balance: individually evaluated for impairments		212,000	92,000
Loans, Ending balance: collectively evaluated for impairments	49,000	161,528,000	100,171,000
Loans, Ending balance	91,123,000	161,740,000	100,263,000
Commercial
Allowance for Loan Losses
Beginning balance	2,212,000	1,305,000	1,278,000
Charge-offs	0	(7,000)	(1)
Recoveries	52,000	70,000	49,000
Provision	(30,000)	844,000	(21,000)
Ending balance	2,234,000	2,212,000	1,305,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	7,000	8,000	4,000
Allowance for loan losses, Ending balance: collectively evaluated for impairments	2,227,000	2,204,000	1,301,000
Allowance for loan losses, Ending balance	2,234,000	2,212,000	1,305,000
Loans, Ending balance: individually evaluated for impairments	336,404,000	2,118,000	1,365,000
Loans, Ending balance: collectively evaluated for impairments	1,437,000	330,853,000	289,890,000
Loans, Ending balance	337,841,000	332,971,000	291,255,000
Single-Family Residential [Member]
Allowance for Loan Losses
Beginning balance	1,843,000	1,274,000	1,325,000
Charge-offs	(89)	(65,000)	(42)
Recoveries	271,000	70,000	66,000
Provision	(12,000)	564,000	(75,000)
Ending balance	2,013,000	1,843,000	1,274,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	57,000	4,000	6,000
Allowance for loan losses, Ending balance: collectively evaluated for impairments	1,956,000	1,839,000	1,268,000
Allowance for loan losses, Ending balance	2,013,000	1,843,000	1,274,000
Loans, Ending balance: individually evaluated for impairments	264,478,000	1,558,000	1,697,000
Loans, Ending balance: collectively evaluated for impairments	1,633,000	270,767,000	267,778,000
Loans, Ending balance	266,111,000	272,325,000	269,475,000
Construction and Land Development
Allowance for Loan Losses
Beginning balance	1,196,000	694,000	813,000
Charge-offs	0	(5,000)	(21)
Recoveries	121,000	36,000	45,000
Provision	(124,000)	471,000	(143,000)
Ending balance	1,193,000	1,196,000	694,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	1,000	1,000	2,000
Allowance for loan losses, Ending balance: collectively evaluated for impairments	1,192,000	1,195,000	692,000
Allowance for loan losses, Ending balance	1,193,000	196,000	694,000
Loans, Ending balance: individually evaluated for impairments	95,754,000	7,000	10,000
Loans, Ending balance: collectively evaluated for impairments	6,000	94,117,000	92,586,000
Loans, Ending balance	95,760,000	94,124,000	92,596,000
Single-Family Residential - Banco de la Gente Non-Tradtional
Allowance for Loan Losses
Beginning balance	1,052,000	1,073,000	1,177,000
Charge-offs	0	0	0
Recoveries	0	0	0
Provision	(188,000)	(21,000)	(104,000)
Ending balance	864,000	1,052,000	1,073,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	672,000	844,000	925,000
Allowance for loan losses, Ending balance: collectively evaluated for impairments	192,000	208,000	148,000
Allowance for loan losses, Ending balance	864,000	1,052,000	1,073,000
Loans, Ending balance: individually evaluated for impairments	13,352,000	11,353,000	12,899,000
Loans, Ending balance: collectively evaluated for impairments	9,795,000	15,530,000	17,894,000
Loans, Ending balance	23,147,000	26,883,000	30,793,000
Multifamily and Farmland
Allowance for Loan Losses
Beginning balance	122,000	120,000	83,000
Charge-offs	0	0	0
Recoveries	3,000	0	0
Provision	25,000	2,000	37,000
Ending balance	150,000	122,000	120,000
Allowance for loan losses, Ending balance: individually evaluated for impairments	0	0	0
Allowance for loan losses, Ending balance: collectively evaluated for impairments	150,000	122,000	120,000
Allowance for loan losses, Ending balance	150,000	122,000	120,000
Loans, Ending balance: individually evaluated for impairments	0	0	0
Loans, Ending balance: collectively evaluated for impairments	58,366,000	48,880,000	48,090,000
Loans, Ending balance	58,366,000	48,880,000	48,090,000
Farm Loans (Not Secured by Real Estate)
Allowance for Loan Losses
Beginning balance	0	0	0
Charge-offs		0	0
Recoveries	0	0	0
Provision	0	0	0
Ending balance	0	0	0
Allowance for loan losses, Ending balance: individually evaluated for impairments	0	0	0
Allowance for loan losses, Ending balance: collectively evaluated for impairments	0	0	0
Allowance for loan losses, Ending balance	0	0	0
Loans, Ending balance: individually evaluated for impairments	0	0	0
Loans, Ending balance: collectively evaluated for impairments	796	855	1,033
Loans, Ending balance	$ 796,000	$ 855,000	$ 1,033,000

Loans (Details 7)

Loans (Details 7) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Credit Risk Profile
Total loans	$ 884,869,000	$ 948,639,000
Commercial loans (not secured by real estate)
Credit Risk Profile
Total loans	91,172,000	161,740,000
Consumer loans (not secured by real estate)
Credit Risk Profile
Total loans	6,436,000	7,113,000
Single-family residential
Credit Risk Profile
Total loans	266,111,000	272,325,000
Commercial
Credit Risk Profile
Total loans	337,841,000	332,971,000
Multifamily and Farmland
Credit Risk Profile
Total loans	58,366,000	48,880,000
Construction and Land Development
Credit Risk Profile
Total loans	95,760,000	94,124,000
Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	23,147,000	26,883,000
Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	796,000	855,000
All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	5,240,000	3,748,000
Good Quality
Credit Risk Profile
Total loans	623,040,000	623,201,000
Good Quality \| Single-Family Residential [Member]
Credit Risk Profile
Total loans	129,856,000	115,109,000
Good Quality \| Commercial
Credit Risk Profile
Total loans	272,786,000	241,273,000
Good Quality \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	68,183,000	128,727,000
Good Quality \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	3,510,000	3,826,000
Good Quality \| Multifamily and Farmland
Credit Risk Profile
Total loans	54,945	44,890,000
Good Quality \| Construction and Land Development
Credit Risk Profile
Total loans	80,325,000	76,897,000
Good Quality \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	8,712,000	10,170,000
Good Quality \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	792,000	832,000
Good Quality \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	3,931,000	1,477,000
Excellent Quality
Credit Risk Profile
Total loans	6,875,000	11,179,000
Excellent Quality \| Single-Family Residential [Member]
Credit Risk Profile
Total loans	5,923,000	9,867,000
Excellent Quality \| Commercial
Credit Risk Profile
Total loans	0	0
Excellent Quality \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	371,000	406,000
Excellent Quality \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	581,000	678,000
Excellent Quality \| Construction and Land Development [Member]
Credit Risk Profile
Total loans	0	228,000
Excellent Quality \| Multifamily and Farmland
Credit Risk Profile
Total loans	0	0
Excellent Quality \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	0	0
Excellent Quality \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Excellent Quality \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
High Quality
Credit Risk Profile
Total loans	169,179,000	194,001,000
High Quality \| Commercial
Credit Risk Profile
Total loans	28,546,000	40,569,000
High Quality \| Single-Family Residential
Credit Risk Profile
Total loans	109,337,000	121,331,000
High Quality \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	16,177,000	19,187,000
High Quality \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	2,039,000	2,237,000
High Quality \| Multifamily and Farmland
Credit Risk Profile
Total loans	19,000	22,000
High Quality \| Construction and Land Development
Credit Risk Profile
Total loans	11,752,000	9,092,000
High Quality \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	0	0
High Quality \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
High Quality \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	1,309,000	1,563,000
Management Attention
Credit Risk Profile
Total loans	68,169,000	92,523,000
Management Attention \| Single-Family Residential [Member]
Credit Risk Profile
Total loans	14,964,000	20,012,000
Management Attention \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	284,000	336,000
Management Attention \| Commercial
Credit Risk Profile
Total loans	30,937,000	39,370,000
Management Attention \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	5,214,000	11,571,000
Management Attention \| All Other Loans (Not Secured by Real Estate) [Member]
Credit Risk Profile
Total loans	0	708,000
Management Attention \| Multifamily and Farmland
Credit Risk Profile
Total loans	2,754,000	3,274,000
Management Attention \| Construction and Land Development
Credit Risk Profile
Total loans	3,534,000	4,917,000
Management Attention \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	10,478,000	12,312,000
Management Attention \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	4,000	23,000
Watch
Credit Risk Profile
Total loans	10,902,000	20,908,000
Watch \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	1,177,000	1,583,000
Watch \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	1,000	6,000
Watch \| Single-Family Residential
Credit Risk Profile
Total loans	2,464,000	2,947,000
Watch \| Commercial
Credit Risk Profile
Total loans	4,938,000	10,871,000
Watch \| Multifamily and Farmland
Credit Risk Profile
Total loans	543,000	694,000
Watch \| Construction and Land Development
Credit Risk Profile
Total loans	76,000	2,906,000
Watch \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	1,703,000	1,901,000
Watch \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Watch \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Substandard
Credit Risk Profile
Total loans	6,704,000	6,827,000
Substandard \| Commercial
Credit Risk Profile
Total loans	634,000	888,000
Substandard \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	50,000	266,000
Substandard \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	21,000	30,000
Substandard \| Single-Family Residential
Credit Risk Profile
Total loans	3,567,000	3,059,000
Substandard \| Multifamily and Farmland
Credit Risk Profile
Total loans	105,000	0
Substandard \| Construction and Land Development
Credit Risk Profile
Total loans	73,000	84,000
Substandard \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	2,254,000	2,500,000
Substandard \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Substandard \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Doubtful
Credit Risk Profile
Total loans	0	0
Doubtful \| Commercial
Credit Risk Profile
Total loans	0	0
Doubtful \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Doubtful \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Doubtful \| Single-Family Residential
Credit Risk Profile
Total loans	0	0
Doubtful \| Multifamily and Farmland
Credit Risk Profile
Total loans	0	0
Doubtful \| Construction and Land Development
Credit Risk Profile
Total loans	0	0
Doubtful \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	0	0
Doubtful \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Doubtful \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Loss
Credit Risk Profile
Total loans	0	0
Loss \| Commercial
Credit Risk Profile
Total loans	0	0
Loss \| Commercial Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Loss \| Consumer Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Loss \| Single-Family Residential
Credit Risk Profile
Total loans	0	0
Loss \| Multifamily and Farmland
Credit Risk Profile
Total loans	0	0
Loss \| Construction and Land Development
Credit Risk Profile
Total loans	0	0
Loss \| Single-Family Residential - Banco de la Gente Non-Tradtional
Credit Risk Profile
Total loans	0	0
Loss \| Farm Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	0	0
Loss \| All Other Loans (Not Secured by Real Estate)
Credit Risk Profile
Total loans	$ 0	$ 0

Loans (Details Narrative)

Loans (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
Loans (Details Narrative) - USD ($)	Mar. 27, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Impaired loan		$ 5,300,000	$ 5,800,000	$ 5,300,000
Net of deferred cost		198,000	1,400,000
Deferred PPP loan fees		945,000	2,600,000
Allowance for loan and leases losses		52,000	61,000	$ 59,000
Paycheck Protection Program [Member]
PPP loan Amount			128,100,000
PPP loan program description	On March 27, 2020, President Trump signed the CARES Act, which established a $2 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the PPP
PPP loan outstanding amount			75,800,000
Fees paid under ppp loan		5,700,000
Recognized ppp loan fee income		$ 3,400,000	1,400,000
Allowance for Loan and Lease Losses [Member]
Percentage of construction and land development loans in Bank's loan portfolio		11.00%
Percentage of single-family residential loans in Bank's loan portfolio		33.00%
Percentage of single-family residential - Banco de la Gente stated income loans in Bank's loan portfolio		3.00%
Percentage of commercial real estate loans in Bank's loan portfolio		38.00%
Percentage of commercial loans in Bank's loan portfolio		10.00%
Percentage of Multifamily and farmland loans portfolio		7.00%
Accruing impaired loans		$ 18,300,000	21,300,000
Total current loans			119,600,000
Loan amount decrease			$ 18,300,000
TDR residential mortage portfolio loan amount		$ 250,000

Premises and Equipment (Details

Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
4. Premises and Equipment
Land	$ 3,857	$ 3,970
Buildings and improvements	18,359	18,804
Furniture and equipment	25,420	26,565
Construction in process	0	10
Total premises and equipment	47,636	49,349
Less accumulated depreciation	31,532	30,749
Total net premises and equipment	$ 16,104	$ 18,600

Premises and Equipment (Detai_2

Premises and Equipment (Details Narrative) - USD ($)	12 Months Ended
Premises and Equipment (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
4. Premises and Equipment
Depreciation expense	$ 2,600,000	$ 2,500,000	$ 2,300,000
Net losses on the sale of and write-downs on premises and equipment	$ (105,000)	$ 0	$ 239,000

Leases (Details)

Leases (Details) $ in Thousands	12 Months Ended
Leases (Details) $ in Thousands	Dec. 31, 2021USD ($)
5. Leases
Operating lease cost	$ 737
Cash paid for amounts included in the measurement of lease liabilities	717
Operating cash flows from operating leases	0
Right-of-use assets obtained in exchange for new lease liabilities - operating leases	$ 1,927
Weighted-average remaining lease term - operating leases	8 years 7 days
Weighted-average discount rate - operating leases	2.39%

Leases (Details 1)

Leases (Details 1) $ in Thousands	Dec. 31, 2021USD ($)
5. Leases
2022	$ 740
2023	746
2024	691
2025	635
2026	518
Thereafter	1,838
Total	5,168
Less: imputed interest	(491)
Operating lease liability	$ 4,677

Leases (Details Narrative)

Leases (Details Narrative) - USD ($)	12 Months Ended
Leases (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
5. Leases
Operating ROU assets	$ 4,612,000	$ 3,423,000
Operating lease liabilities	4,677,000	3,471,000
Rent expense	$ 703,000	$ 880,000	$ 949,000
Lease term	15 years

Time Deposits (Details)

Time Deposits (Details) $ in Thousands	Dec. 31, 2021USD ($)
6. Time Deposits
2022	$ 51,615
2023	21,461
2024	20,663
2025	3,822
2026 and thereafter	3,689
Total	$ 101,250

Time Deposits (Details Narrativ

Time Deposits (Details Narrative) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
6. Time Deposits
Time deposits purchased through third party brokers, including certificates of deposit participated through the Certificate of Deposit Account Registry Service ("CDARS") on behalf of local customers	$ 11.1	$ 12.4
CDARS balances	$ 3	$ 4.3
Weighted average rate of brokered deposits	1.49%	1.43%

Federal Home Loan Bank and Fede

Federal Home Loan Bank and Federal Reserve Bank Borrowings (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2021
7. Federal Home Loan Bank and Federal Reserve Bank Borrowings
Loans pledged as collateral to the FHLB	$ 1,100,000	$ 137,400,000
FHLB stock owned	1,000,000	707,000
Carrying value of loans pledged as collateral to the FHLB		475,200,000
Remaining availability credit with the FHLB		90,900,000
Prepayment of penalty	$ 70,000,000
Availability under the line of credit with the FRB		$ 346,200,000

Junior Subordinated Debentures

Junior Subordinated Debentures (Details Narrative) $ in Millions	12 Months Ended
	Dec. 31, 2021USD ($)
7. Federal Home Loan Bank and Federal Reserve Bank Borrowings
Preferred beneficial interest	$ 20
Debenture purchased	$ 20.6
Maturity of debentures	Jun. 28, 2036

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
9. Income Taxes
Current expense									$ 4,079	$ 3,049	$ 2,972
Deferred income tax expense									(283)	(560)	164
Total income tax	$ 732	$ 824	$ 1,194	$ 1,046	$ 374	$ 1,113	$ 535	$ 467	$ 3,796	$ 2,489	$ 3,136

Income Taxes (Details 1)

Income Taxes (Details 1) - USD ($)	3 Months Ended								12 Months Ended
Income Taxes (Details 1) - USD ($)	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
9. Income Taxes
Tax expense at statutory rate									$ 3,975,000	$ 2,908,000	$ 3,613,000
Differences:
State income tax, net of federal income tax effect									339,000	261,000	351,000
Tax exempt interest income									(497,000)	(649,000)	(802,000)
Increase in cash surrender value of life insurance									(83,000)	(80,000)	(81,000)
Tax credits									(234)	(234)	0
Nondeductible interest and other expense									30,000	46,000	40,000
Other									266,000	237,000	15,000
Total income tax	$ 732,000	$ 824,000	$ 1,194,000	$ 1,046,000	$ 374,000	$ 1,113,000	$ 535,000	$ 467,000	$ 3,796,000	$ 2,489,000	$ 3,136,000

Income Taxes (Details 2)

Income Taxes (Details 2) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Allowance for loan losses	$ 2,149	$ 2,276
Accrued retirement expense	1,148	1,190
Restricted stock	209	190
Interest income on nonaccrual loans	2	1
Lease liability	1,075	798
Total gross deferred tax assets	4,583	4,455
Deferred tax liabilities:
Deferred loan fees	263	284
Accumulated depreciation	563	873
Prepaid expenses	4	5
ROU Asset	1,060	787
Other	(55)	41
Unrealized gain on available for sale securities	29	1,611
Total gross deferred tax liabilities	1,864	3,601
Net deferred tax asset	$ 2,719	$ 854

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	12 Months Ended
Related Party Transactions (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
10. Related Party Transactions
Beginning balance	$ 1,852,000	$ 3,472
New loans	3,636,000	4,189,000
Repayments	(2,801,000)	(5,809,000)
Ending balance	$ 2,687,000	$ 1,852,000

Related Party Transactions (D_2

Related Party Transactions (Details Narrative) - USD ($)	12 Months Ended
Related Party Transactions (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
10. Related Party Transactions
Related party deposits	$ 43,400,000	$ 44,500,000
Lease payments	$ 173,000	$ 173,000

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Standby letters of credit and financial guarantees written
Commitments and contingencies	$ 4,892	$ 4,745
Commitments to extend credit
Commitments and contingencies	$ 304,258	$ 299,039

Commitments and Contingencies_2

Commitments and Contingencies (Details Narrative) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2017
11. Commitments and Contingencies
Overnight federal funds	$ 110.5
Commitments	2.9
Unfunded commitments	2.2
Investments		$ 3
Alloted to each property		$ 1.5
Future cash requirements	$ 309.2

Employee and Director Benefit P

Employee and Director Benefit Programs (Details) - USD ($)	12 Months Ended
Employee and Director Benefit Programs (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
12. Employee and Director Benefit Programs
Benefit obligation at beginning of period	$ 4,870,000	$ 4,700
Service cost	359,000	323,000	$ 299,000
Interest cost	70,000	63,000	58,000
Benefits paid	(288,000)	(216,000)
Benefit obligation at end of period	$ 5,011,000	$ 4,870,000	$ 4,700

Employee and Director Benefit_2

Employee and Director Benefit Programs (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
12. Employee and Director Benefit Programs
Fair value of plan assets	$ 0	$ 0
Funded status	(5,011,000)	(4,870,000)
Unrecognized prior service cost/benefit	0	0
Unrecognized net actuarial loss	0	0
Net amounts recognized	(5,011,000)	(4,870,000)
Intangible assets	0	0
Unfunded accrued liability	(5,011,000)	(4,870,000)
Net amounts recognized	$ (5,011,000)	$ (4,870,000)	$ (4,700)

Employee and Director Benefit_3

Employee and Director Benefit Programs (Details 2) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
12. Employee and Director Benefit Programs
Benefit obligation at beginning of period	$ 5,011,000	$ 4,870,000	$ 4,700
Fair value of plan assets	$ 0	$ 0

Employee and Director Benefit_4

Employee and Director Benefit Programs (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
12. Employee and Director Benefit Programs
Service cost	$ 359	$ 323	$ 299
Interest cost	70	63	58
Net periodic cost	$ 429	$ 386	$ 357
Weighted average discount rate assumption used to determine benefit obligation	5.50%	5.49%	5.49%

Employee and Director Benefit_5

Employee and Director Benefit Programs (Details 4) $ in Thousands	Dec. 31, 2021USD ($)
12. Employee and Director Benefit Programs
2022	$ 327
2023	348
2024	360
2025	376
2026	375
Thereafter	$ 8,795

Employee and Director Benefit_6

Employee and Director Benefit Programs (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
12. Employee and Director Benefit Programs
Matching of employee contributions, percentage	4.00%	4.00%	4.00%
Defined Benefit Plan, Contributions by Employer	$ 709,000	$ 692,000	$ 691,000
Expenses incurred for benefits relating to the postretirement benefit plan	477,000	388,000	$ 361,000
Postretirement Benefits paid	$ 288,000	$ 216,000

Regulatory Matters (Details)

Regulatory Matters (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Total capital (to Risk-Weighted Assets) \| Consolidated
Actual, amount	$ 166,628,000	$ 159,407,000
Actual, ratio	16.35%	16.07%
For capital adequacy purposes, amount	$ 81,547,000	$ 79,372,000
For capital adequacy purposes, ratio	8.00%	8.00%
To be well capitalized under prompt corrective action provisions, amount	$ 0	$ 0
To be well capitalized under prompt corrective action provisions, ratio	0.00%	0.00%
Total capital (to Risk-Weighted Assets) \| Bank
Actual, amount	$ 164,975,000	$ 157,106,000
Actual, ratio	16.19%	15.85%
For capital adequacy purposes, amount	$ 81,539,000	$ 79,283,000
For capital adequacy purposes, ratio	8.00%	8.00%
To be well capitalized under prompt corrective action provisions, amount	$ 107,020,000	$ 104,059,000
To be well capitalized under prompt corrective action provisions, ratio	10.50%	10.50%
Tier 1 Capital (to Risk- Weighted Assets) \| Consolidated
Actual, amount	$ 157,273,000	$ 149,499,000
Actual, ratio	15.43%	15.07%
For capital adequacy purposes, amount	$ 61,160,000	$ 59,529,000
For capital adequacy purposes, ratio	6.00%	6.00%
To be well capitalized under prompt corrective action provisions, amount	$ 0	$ 0
To be well capitalized under prompt corrective action provisions, ratio	0.00%	0.00%
Tier 1 Capital (to Risk- Weighted Assets) \| Bank
Actual, amount	$ 155,620,000	$ 147,198,000
Actual, ratio	15.27%	14.85%
For capital adequacy purposes, amount	$ 61,154,000	$ 59,462,000
For capital adequacy purposes, ratio	6.00%	6.00%
To be well capitalized under prompt corrective action provisions, amount	$ 86,635,000	$ 84,238,000
To be well capitalized under prompt corrective action provisions, ratio	8.50%	8.50%
Tier 1 Capital (Average Assets) \| Consolidated
Actual, amount	$ 157,273,000	$ 149,499,000
Actual, ratio	9.64%	10.24%
For capital adequacy purposes, amount	$ 65,258,000	$ 58,378,000
For capital adequacy purposes, ratio	4.00%	4.00%
To be well capitalized under prompt corrective action provisions, amount	$ 0	$ 0
To be well capitalized under prompt corrective action provisions, ratio	0.00%	0.00%
Tier 1 Capital (Average Assets) \| Bank
Actual, amount	$ 155,620,000	$ 147,198,000
Actual, ratio	9.50%	10.04%
For capital adequacy purposes, amount	$ 65,557,000	$ 58,662,000
For capital adequacy purposes, ratio	4.00%	4.00%
To be well capitalized under prompt corrective action provisions, amount	$ 65,557,000	$ 58,662,000
To be well capitalized under prompt corrective action provisions, ratio	4.00%	4.00%
Common Equity Tier 1 (to Risk-Weighted Assets) \| Consolidated
Actual, amount	$ 142,273,000	$ 134,499,000
Actual, ratio	13.96%	13.56%
For capital adequacy purposes, amount	$ 45,870,000	$ 44,647,000
For capital adequacy purposes, ratio	4.50%	4.50%
To be well capitalized under prompt corrective action provisions, amount	$ 0	$ 0
To be well capitalized under prompt corrective action provisions, ratio	0.00%	0.00%
Common Equity Tier 1 (to Risk-Weighted Assets) \| Bank
Actual, amount	$ 155,620,000	$ 147,198,000
Actual, ratio	15.27%	14.85%
For capital adequacy purposes, amount	$ 45,866,000	$ 44,597,000
For capital adequacy purposes, ratio	4.50%	4.50%
To be well capitalized under prompt corrective action provisions, amount	$ 71,347,000	$ 69,373,000
To be well capitalized under prompt corrective action provisions, ratio	7.00%	7.00%

Shareholders Equity (Details Na

Shareholders Equity (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Assets	$ 1,624,193	$ 1,416,175
Preferred stock shares issued	0	0
Equity
Assets	$ 142,400	$ 139,900
Cash dividends paid on common stock	$ 3,800	$ 4,400
Assets in percentage	8.77%	9.88%
Equity \| Directors [Member]
Repurchase of common stock shares	127,597
Equity \| Director
Repurchase of common stock shares	126,800
Preferred stock shares issued	5,000,000
Repurchase of common stock	$ 3,000

Other Operating Income and Expe

Other Operating Income and Expense (Details) - USD ($)	12 Months Ended
Other Operating Income and Expense (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
15. Other Operating Income and Expense
Visa debit card income	$ 5,045,000	$ 4,237,000	$ 4,145,000
Bank owned life insurance income	397,000	380,000	383,000
Gain (loss) on sale of premises and equipment	105,000	0	(239,000)
Other	2,092,000	1,315,000	1,559,000
Miscellaneous non-interest income	7,639,000	5,932,000	5,848,000
ATM expense	619,000	567,000	579,000
Data processing	643,000	635,000	616,000
Deposit program expense	415,000	426,000	515,000
Dues and subscriptions	588,000	538,000	421,000
FHLB advance prepayment penalty	0	1,100,000	0
Internet banking expense	768,000	729,000	681,000
Office supplies	374,000	538,000	467,000
Telephone	730,000	794,000	802,000
Other	3,737,000	3,217,000	3,893,000
Other	$ 7,874,000	$ 8,544,000	$ 7,974,000

Fair Value of Financial Instrum

Fair Value of Financial Instruments (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Assets:
Investment securities available for sale	$ 406,549,000	$ 245,249,000
Mortgage loans held for sale	3,637,000	9,139,000
Level 1
Assets:
Investment securities available for sale	0	0
Mortgage loans held for sale	0	0
Liabilities:
Cash and cash equivalents	277,499,000	161,580,000
Other investments	0	0
Loans, net	0	0
Cash surrender value of life insurance	0	0
Deposits	0	0
Securities sold under agreements to repurchase	0	0
Junior subordinated debentures	0	0
Level 2
Assets:
Investment securities available for sale	406,549,000	245,249,000
Mortgage loans held for sale	0	0
Liabilities:
Cash and cash equivalents	0	0
Other investments	0	0
Loans, net	0	0
Cash surrender value of life insurance	1,510,000	1,320,000
Deposits	0	0
Securities sold under agreements to repurchase	37,094,000	26,201,000
Junior subordinated debentures	15,464,000	15,464,000
Level 3
Assets:
Investment securities available for sale	0	0
Mortgage loans held for sale	3,637,000	9,139,000
Liabilities:
Cash and cash equivalents	0	0
Other investments	3,668,000	4,155,000
Loans, net	855,814,000	924,845,000
Cash surrender value of life insurance	0	0
Deposits	1,401,833,000	1,216,503,000
Securities sold under agreements to repurchase	0	0
Junior subordinated debentures	0	0
Estimated Fair Value
Assets:
Investment securities available for sale	406,549,000	245,249,000
Mortgage loans held for sale	3,637,000	9,139,000
Liabilities:
Cash and cash equivalents	277,499,000	161,580,000
Other investments	3,668,000	4,155,000
Loans, net	855,814,000	924,845,000
Cash surrender value of life insurance	1,510,000	1,320,000
Deposits	1,401,833,000	1,216,503,000
Securities sold under agreements to repurchase	37,094,000	26,201,000
Junior subordinated debentures	15,464,000	15,464,000
Carrying Amount
Assets:
Investment securities available for sale	406,549,000	245,249,000
Mortgage loans held for sale	3,637,000	9,139,000
Liabilities:
Cash and cash equivalents	277,499,000	161,580,000
Other investments	3,668,000	4,155,000
Loans, net	875,514,000	938,731,000
Cash surrender value of life insurance	1,510,000	1,320,000
Deposits	1,412,748,000	1,221,086,000
Securities sold under agreements to repurchase	37,094,000	26,201,000
Junior subordinated debentures	$ 15,464,000	$ 15,464,000

Peoples Bancorp of North Caro_2

Peoples Bancorp of North Carolina Inc (Parent Company Only) Condensed Financial Statements Balance Sheets (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assets
Interest-bearing time deposit	$ 232,788,000	$ 118,843,000
Investment in subsidiaries					$ 3,000,000
Total assets	1,624,193,000	1,416,175,000
Junior subordinated debentures	15,464,000	15,464,000
Total liabilities	1,481,824,000	1,276,276,000
Total shareholders' equity	142,369,000	139,899,000	$ 134,120,000	$ 123,617,000
Total liabilities and shareholders' equity	1,624,193,000	1,416,175,000
Parent Company
Assets
Interest-bearing time deposit	1,000,000	1,000,000
Investment in subsidiaries	155,716,000	152,598,000
Investment in PEBK Capital Trust II	464	464
Other assets	105	650
Total assets	157,846,000	155,376,000
Junior subordinated debentures	15,464,000	15,464,000
Total liabilities	13,000	13,000
Total shareholders' equity	142,369,000	139,899,000
Total liabilities and shareholders' equity	$ 157,846,000	$ 155,376,000

Peoples Bancorp of North Caro_3

Peoples Bancorp of North Carolina Inc (Parent Company Only) Condensed Financial Statements Statements of Earnings (Details 1) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Expenses:
Interest	$ 687,000	$ 861,000	$ 842,000	$ 815,000	$ 941,000	$ 942,000	$ 912,000	$ 1,041,000	$ 3,205,000	$ 3,836,000	$ 3,757,000
Total income tax	732,000	824,000	1,194,000	1,046,000	374,000	1,113,000	535,000	467,000	3,796,000	2,489,000	3,136,000
Net earnings	$ 3,007,000	$ 3,390,000	$ 4,615,000	$ 4,121,000	$ 1,920,000	$ 4,509,000	$ 2,561,000	$ 2,367,000	15,133,000	11,357,000	14,067,000
Parent Company
Revenues
Interest and dividend from subsidiary									7,419	7,539	12,850
Total revenues									7,419,000	7,539,000	12,850,000
Expenses:
Interest									280,000	370,000	844,000
Other operating expenses									613,000	625,000	629,000
Total expenses									893,000	995,000	1,473,000
Income before income tax benefit and equity in undistributed earnings of subsidiaries									6,526	6,544	11,377
Total income tax									185,000	201,000	299,000
Income before equity in undistributed earnings of subsidiaries									6,711,000	6,745,000	11,676,000
Equity in undistributed earnings of subsidiaries									8,422,000	4,612,000	2,391,000
Net earnings									$ 15,133,000	$ 11,357,000	$ 14,067,000

Peoples Bancorp of North Caro_4

Peoples Bancorp of North Carolina Inc (Parent Company Only) Condensed Financial Statements (Details 2) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net earnings	$ 3,007,000	$ 3,390,000	$ 4,615,000	$ 4,121,000	$ 1,920,000	$ 4,509,000	$ 2,561,000	$ 2,367,000	$ 15,133,000	$ 11,357,000	$ 14,067,000
Other assets									(498,000)	(596,000)	724,000
Net cash provided by operating activities									26,900,000	9,162,000	13,197,000
Proceeds from calls and maturities of investment securities available for sale									9,540,000	62,408,000	40,561,000
Net cash used by investing activities									(106,138,000)	(148,972,000)	(48,181,000)
Net cash (used) provided by financing activities									195,157,000	249,003,000	44,001,000
Parent Company
Cash at end of year	$ 561,000				$ 664,000				561,000	664,000	1,187,000
Net earnings									15,133,000	11,357,000	14,067,000
Equity in undistributed earnings of subsidiaries									(8,422,000)	(4,612,000)	(2,391,000)
Other assets									545,000	(19,000)	57,000
Other liabilities									0	(10,000)	(13,000)
Net cash provided by operating activities										6,716,000	11,720,000
Proceeds from calls and maturities of investment securities available for sale									0	250,000	0
Net cash used by investing activities										250,000	0
Repayments of Junior Subordinated Debentures									0	155,000	5,000,000
Cash dividends paid on common stock									3,793,000	4,392,000	3,939,000
Stock repurchase									(3,605,000)	(2,999,000)	(2,490,000)
Proceeds from exercise of restricted stock units									39,000	57,000	207,000
Net cash (used) provided by financing activities									(7,359,000)	(7,489,000)	(11,222,000)
Net change in cash and cash equivalents									$ (103,000)	$ (523,000)	$ 498,000

Quarterly Data (Details)

Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
18. Quarterly Data
Total interest income	$ 11,319	$ 11,421	$ 12,517	$ 11,922	$ 12,202	$ 11,868	$ 11,638	$ 12,250
Total interest expense	687	861	842	815	941	942	912	1,041	$ 3,205	$ 3,836	$ 3,757
Net interest income	10,632	10,560	11,675	11,107	11,261	10,926	10,726	11,209	43,974	44,122	45,844
Provision for loan losses	300	182	226	455	799	522	1,417	1,521	(1,163)	4,259	863
Total non-interest income	6,966	6,040	6,040	5,873	5,948	7,132	5,239	4,595	24,919	22,914	17,739
Total non-interest expense	14,159	12,568	12,132	12,268	14,116	11,914	11,452	11,449	51,127	48,931	45,517
Income before income taxes	3,739	4,214	5,809	5,167	2,294	5,622	3,096	2,834	18,929	13,846	17,203
Total income tax	732	824	1,194	1,046	374	1,113	535	467	3,796	2,489	3,136
Net earnings	$ 3,007	$ 3,390	$ 4,615	$ 4,121	$ 1,920	$ 4,509	$ 2,561	$ 2,367	$ 15,133	$ 11,357	$ 14,067
Basic earnings per share	$ 0.55	$ 0.61	$ 0.82	$ 0.73	$ 0.34	$ 0.80	$ 0.46	$ 0.41	$ 2.71	$ 2.01	$ 2.43
Diluted net earnings per share	$ 0.53	$ 0.59	$ 0.80	$ 0.71	$ 0.33	$ 0.78	$ 0.44	$ 0.40	$ 2.63	$ 1.95	$ 2.36

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($) $ in Millions	Mar. 11, 2022	Dec. 31, 2021
19. Subsequent Events
Outstanding balance of PPP loans	$ 9.3	$ 18