EXHIBIT (99) (a)
NEWS RELEASE APRIL 21, 2003
CONTACT: TONY W. WOLFE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
A. JOSEPH LAMPRON
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
828-464-5620, FAX 828-465-6780
FOR IMMEDIATE RELEASE
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PEOPLES BANCORP ANNOUNCES FIRST QUARTER EARNINGS RESULTS
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Peoples Bancorp of North Carolina, Inc., the parent company of Peoples
Bank, reported first quarter 2003 net income of $1,418,088, or $.45 basic and
diluted net income per share for the three months ended March 31, 2003. Net
income from recurring operations for the three months ended March 31, 2003 was
$1,124,228, or $.36 basic and diluted net income per share, representing a 27%
increase over first quarter 2002 net income from recurring operations of
$885,876 or $.28 basic and diluted net income per share. Non-recurring income in
2003 amounted to $293,860, net of income tax expense, associated with the sale
of the Bank's $3.7 million credit card portfolio. The Company did not have any
non-recurring income in first quarter 2002.
Tony W. Wolfe, President and Chief Executive Officer, attributed the
increase in first quarter recurring earnings primarily to increased net interest
income, which was only partially offset by increased provision for loan losses
and non-interest expense. Net interest income increased 22% to $5,456,163 for
the three months ended March 31, 2003 compared to $4,481,642 for the same period
one year ago. The provision for loan losses for the three months ended March 31,
2003 was $793,000 as compared to $500,000 in first quarter 2002. Non-interest
expense increased 6% to $4,446,933 for the three months ended March 31, 2003, as
compared to $4,214,709 for the same period last year.
Excluding non-recurring income associated with the sale of the Bank's
credit card portfolio, non-interest income for the three months ended March 31,
2003 decreased 1% to $1,505,599, as compared to $1,523,943 for the same period
last year.
Total assets as of March 31, 2003 amounted to $661,332,076, an increase of
6% compared to total assets of $623,283,974 at March 31, 2002. This increase is
primarily attributable to an increase in loans, which was partially offset by a
decrease in available-for-sale securities.
Loans increased 7% to $528,866,443 as of March 31, 2003 compared to
$495,224,705 as of March 31, 2002. Non-performing assets totaled $9,570,350 at
March 31, 2003 or 1.45% of total assets, compared to $4,645,074 at March 31,
2002 or .75% of total assets. The allowance for loan losses at March 31, 2003
amounted to $7,606,124 or 1.44% of total loans compared to $6,481,894 or 1.31%
of total loans at March 31, 2002.
PEOPLES BANCORP ANNOUNCES FIRST QUARTER EARNINGS RESULTS- PAGE TWO
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Deposits amounted to $536,744,370 as of March 31, 2003, representing an
increase of 8% over deposits of $498,473,528 at March 31, 2002.
Shareholders' equity increased to $49,695,543, or 7.51% of total assets, at
March 31, 2003 as compared to $44,710,147, or 7.17% of total assets, at March
31, 2002.
Peoples Bank operates eleven offices throughout Catawba County, North
Carolina, one office in Alexander County, North Carolina and three offices in
Lincoln County, North Carolina. The Company's common stock is publicly traded
over the counter and is quoted on the Nasdaq National Market under the symbol
"PEBK." Scott and Stringfellow, Inc., Ryan, Beck & Co., Sterne Agee & Leach,
Inc. and Trident Securities, Inc. are market makers for the Company's shares.
(TABLES FOLLOW)
STATEMENTS MADE IN THIS PRESS RELEASE, OTHER THAN THOSE CONCERNING
HISTORICAL INFORMATION, SHOULD BE CONSIDERED FORWARD-LOOKING STATEMENTS
PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE SECURITIES EXCHANGE ACT OF
1934 AND THE PRIVATE SECURITIES LITIGATION ACT OF 1995. THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON INFORMATION CURRENTLY AVAILABLE TO
MANAGEMENT AND ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING
BUT NOT LIMITED TO THOSE DESCRIBED IN PEOPLES BANCORP OF NORTH CAROLINA,
INC.'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2002,
UNDER "GENERAL DESCRIPTION OF BUSINESS" AND OTHERWISE IN THE COMPANY'S
REPORTS AND FILINGS.
PEOPLES BANCORP ANNOUNCES FIRST QUARTER EARNINGS RESULTS - PAGE THREE
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CONSOLIDATED BALANCE SHEETS
March 31, 2003, December 31, 2002 and March 31, 2002
===============================================================================================================
MARCH 31, 2003 December 31, 2002 March 31, 2002
---------------- ------------------- ----------------
(Unaudited) (Unaudited)
ASSETS:
Cash and due from banks $ 15,596,019 $ 13,803,665 $ 10,765,832
Federal funds sold 15,144,000 1,774,000 9,329,000
---------------- ------------------- ----------------
Cash and cash equivalents 30,740,019 15,577,665 20,094,832
Investment securities available for sale 70,555,422 71,735,705 79,833,431
Other investments 4,271,973 4,345,573 4,902,773
---------------- ------------------- ----------------
Total securities 74,827,395 76,081,278 84,736,204
Loans 528,866,443 526,369,746 495,224,705
Mortgage loans held for sale 5,786,084 5,064,635 3,881,823
Less: Allowance for loan losses (7,606,124) (7,247,906) (6,481,894)
---------------- ------------------- ----------------
Net loans 527,046,403 524,186,475 492,624,633
Premises and equipment, net 15,224,207 15,620,977 14,679,262
Accrued interest receivable and other assets 13,494,052 13,275,143 11,149,043
---------------- ------------------- ----------------
Total assets $ 661,332,076 $ 644,741,538 $ 623,283,974
================ =================== ================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Non-interest bearing demand 69,411,825 $ 67,398,458 $ 59,919,920
NOW, MMDA & Savings 152,260,665 156,554,189 149,289,823
Time, $100,000 or more 180,963,909 160,836,596 162,755,529
Other time 134,107,971 130,949,712 126,508,256
---------------- ------------------- ----------------
Total deposits 536,744,370 515,738,955 498,473,528
Demand notes payable to U.S. Treasury 537,019 1,600,000 1,600,000
FHLB borrowings 58,000,000 63,071,429 62,142,857
Trust preferred securities 14,000,000 14,000,000 14,000,000
Accrued interest payable and other liabilities 2,355,144 1,726,421 2,357,442
---------------- ------------------- ----------------
Total liabilities 611,636,533 596,136,805 578,573,827
---------------- ------------------- ----------------
Shareholders' Equity:
Preferred stock, no par value; authorized
5,000,000 shares; no shares issued
and outstanding - - -
Common stock, no par value; authorized
20,000,000 shares; issued and
outstanding 3,133,547 shares in 2003
and 3,145,547 shares in 2002 35,097,773 35,097,773 35,265,773
Retained earnings 13,199,096 12,094,363 10,486,737
Accumulated other comprehensive income 1,398,674 1,412,597 (1,042,363)
---------------- ------------------- ----------------
Total shareholders' equity 49,695,543 48,604,733 44,710,147
---------------- ------------------- ----------------
Total liabilities and shareholders' equity $ 661,332,076 $ 644,741,538 $ 623,283,974
================ =================== ================
MEMORANDUM: LETTERS OF CREDIT $ 1,954,050 $ 2,061,103 $ 1,497,087
================ =================== ================
PEOPLES BANCORP ANNOUNCES FIRST QUARTER EARNINGS RESULTS - PAGE FOUR
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CONSOLIDATED STATEMENTS OF INCOME
For the three months March 31, 2003 and 2002
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THREE MONTHS ENDED
MARCH 31,
2003 2002
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(UNAUDITED) (UNAUDITED)
INTEREST INCOME:
Interest and fees on loans $ 7,783,423 $7,815,535
Interest on federal funds sold 16,929 10,748
Interest on investment securities:
U.S. Government agencies 635,126 700,696
States and political subdivisions 149,661 440,443
Other 108,967 121,732
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Total interest income 8,694,106 9,089,154
INTEREST EXPENSE:
NOW, MMDA & Savings deposits 306,760 510,353
Time deposits 2,102,756 3,218,866
FHLB borrowings 659,941 684,909
Trust preferred securities 166,250 183,750
Other 2,236 9,634
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Total interest expense 3,237,943 4,607,512
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NET INTEREST INCOME 5,456,163 4,481,642
PROVISION FOR LOAN LOSSES 793,000 500,000
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,663,163 3,981,642
OTHER INCOME:
Service charges 772,151 660,496
Other service charges and fees 159,438 162,868
Gain (loss) on sale of securities - -
Mortgage banking income 190,357 229,954
Insurance and brokerage commission 96,961 119,628
Miscellaneous 765,451 350,997
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Total other income 1,984,358 1,523,943
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OTHER EXPENSES:
Salaries and employee benefits 2,563,794 2,437,002
Occupancy 834,889 759,342
Other 1,048,250 1,018,365
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Total other expenses 4,446,933 4,214,709
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INCOME BEFORE INCOME TAXES 2,200,588 1,290,876
INCOME TAXES 782,500 405,000
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NET INCOME $ 1,418,088 $ 885,876
============ ==========
PER SHARE AMOUNTS
Basic net income $ 0.45 $ 0.28
Diluted net income $ 0.45 $ 0.28
Cash dividends $ 0.10 $ 0.10
Book value $ 15.86 $ 14.21
PEOPLES BANCORP ANNOUNCES FIRST QUARTER EARNINGS RESULTS - PAGE FIVE
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FINANCIAL HIGHLIGHTS
For the three months ended March 31, 2003 and 2002
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THREE MONTHS ENDED
MARCH 31,
2003 2002
----------------------------
(UNAUDITED) (Unaudited)
SELECTED AVERAGE BALANCES:
Available for Sale Securities $ 69,086,484 $ 83,509,158
Loans 533,157,212 497,998,781
Earning Assets 613,036,913 589,350,082
Assets 650,176,427 620,338,028
Deposits 519,362,374 489,450,074
Shareholders' Equity 49,957,890 46,183,131
SELECTED KEY DATA:
Net Interest Margin (tax equivalent) 3.66% 3.15%
Return on Average Assets 0.88% 0.58%
Return on Average Shareholders' Equity 11.51% 7.78%
Shareholders' Equity to Total Assets (Period End) 7.51% 7.17%
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period $ 7,247,906 $ 6,090,570
Provision for loan losses 793,000 500,000
Charge-offs (483,696) (153,956)
Recoveries 48,914 45,280
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Balance, end of period $ 7,606,124 $ 6,481,894
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ASSET QUALITY:
Non-accrual Loans $ 7,441,918 $ 4,471,863
90 Days Past Due and still accruing 334,570 78,856
Other Real Estate Owned 272,209 85,555
Repossessed Assets 1,521,653 8,800
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Total Non-performing Assets $ 9,570,350 $ 4,645,074
============= =============
Non-performing Assets to Total Assets 1.45% 0.75%
Allowance for Loan Losses to Non-performing Assets 79.48% 139.54%
Allowance for Loan Losses to Total Loans 1.44% 1.31%
LOAN RISK GRADE ANALYSIS: PERCENTAGE OF LOANS GENERAL RESERVE
BY RISK GRADE PERCENTAGE
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3/31/2003 3/31/2002 3/31/2003 3/31/2002
---------- ---------- ---------- ----------
Risk 1 (Excellent Quality) 9.30% 8.67% 0.15% 0.15%
Risk 2 (High Quality) 31.65% 40.28% 0.50% 0.50%
Risk 3 (Good Quality) 47.62% 43.54% 1.00% 1.00%
Risk 4 (Management Attention) 5.40% 4.91% 2.50% 2.50%
Risk 5 (Watch) 3.22% 0.92% 7.00% 7.00%
Risk 6 (Substandard) 1.29% 0.75% 12.00% 12.00%
Risk 7 (Low Substandard) 0.11% 0.02% 25.00% 25.00%
Risk 8 (Doubtful) 0.00% 0.00% 50.00% 50.00%
Risk 9 (Loss) 0.00% 0.00% 100.00% 100.00%
At March 31, 2003 there were four relationships exceeding $1 million each (which
totaled $10.9 million) in the Watch risk grade and two relationships exceeding
$1 million each (which totaled $4.9 million) in the Substandard risk grade.
Balances of individual relationships exceeding $1 million in these risk grades
ranged from $1.6 million to $3.9 million. If current operating conditions for
these customers remain stable, it is not expected that any of the relationships
with balances exceeding $1 million will become non-performing assets within the
next three to six months. If unforeseen events were to occur, it is possible
that the viability of one or more of these customers could require the
reclassification of their loans to non-accrual.
(END)