Peoples Bancorp achieves notable earnings growth in Q1 2025

In Newton, North Carolina on April 21, 2025, Peoples Bancorp of North Carolina, Inc., the parent company of Peoples Bank, announced its financial results for the first quarter of 2025. The company experienced an increase in net earnings, reporting $4.3 million for the three months ending March 31, 2025, up from $3.9 million in the same period the previous year. This significant upswing has been largely attributed to rises in net interest income and non-interest income, despite challenges from a heightened provision for credit losses and increasing non-interest expenses compared to the prior year. The net interest income saw a positive development, reaching $13.9 million, a modest increase from $13.3 million in Q1 2024. The growth in interest income was primarily driven by an $878,000 rise in interest income and fees on loans. In contrast, there were decreases in interest income from balances due from banks and investment securities, measured at $557,000 and $161,000 respectively. The overall expansion in interest revenue reflects an increase in total loans, which amounted to $1.15 billion by March 31, 2025. In terms of non-interest income, the bank also reported an increase to $6.5 million from $6.0 million year-over-year. Conversely, non-interest expenses slightly rose to $14.6 million compared to $14.5 million in the corresponding quarter of 2024. The income tax expense saw a notable increase, with a total of $1.3 million attributed to an adjustment related to a tax settlement with the North Carolina Department of Revenue, which also contributed to the effective tax rate increase. While the allowance for credit losses on loans remained at $10.0 million, reflecting 0.87% of total loans, adjustments were seen regarding unfunded commitments, which increased to $1.3 million. The report emphasized management's necessity in addressing the environment of rising credit quality concerns amidst the growth trajectory. Overall, these results are indicative of a positive financial trajectory for Peoples Bancorp, underscoring its continued commitment to managing risks while exploring growth opportunities in the bank’s lending activities.