Executive Summary

Q1 2025 diluted EPS was $0.79 and basic EPS was $0.82, up year over year from $0.72/$0.74 and up sequentially from $0.65/$0.67; net earnings were $4.3M, supported by higher net interest income and non-interest income despite a higher provision and tax rate .
Net interest margin expanded to 3.51% from 3.39% in Q4 2024 and 3.33% in Q1 2024, with loans growing to $1.15B and deposits to $1.52B, while core deposits remained ~90% of total .
Asset quality remained solid though non-performing assets ticked up to $5.1M (0.30% of assets) from $4.8M (0.29%) at year-end; ACL on loans stood at $10.0M (0.87% of total loans) .
Capital return accelerated: a $3.0M share repurchase authorization (Mar 13) and dividends of $0.20 (regular) plus a $0.16 special in Q1; potential stock support/catalyst from buybacks and rising book value ($26.14) .

What Went Well and What Went Wrong

What Went Well

Net interest income rose to $13.9M (+$0.6M YoY) on higher loan income and lower deposit costs; NIM expanded to 3.51% vs 3.33% a year ago .
Non-interest income increased to $6.5M, driven primarily by strong appraisal management fee income (+$0.6M YoY) reflecting higher appraisal volume .
Management highlighted drivers clearly: “the increase in first quarter net earnings [was] due to increases in net interest income and non-interest income,” partially offset by higher provision and OPEX (William D. Cable, Sr., CEO) .

What Went Wrong

Provision for credit losses rose to $268K (from $91K YoY), tied to higher unfunded construction commitments and loan growth, partially offset by removal of a Hurricane Helene reserve; NPAs rose to $5.1M (0.30%) from $4.8M (0.29%) QoQ .
Non-interest expense edged up to $14.6M, primarily from appraisal-related costs, though partially offset by lower salaries/benefits, other OPEX, and occupancy .
Effective tax rate increased materially to 22.85% from 16.62% YoY due to prior-year items; tax expense was $1.3M vs $0.8M in Q1 2024, constraining net earnings leverage .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Net Interest Income ($USD M)	$13.3	$13.8	$13.9
Provision for Credit Losses ($USD K)	$91	$(205)	$268
Non-Interest Income ($USD M)	$6.0	$7.1	$6.5
Non-Interest Expense ($USD M)	$14.5	$16.5	$14.6
Earnings Before Income Taxes ($USD M)	$4.7	$4.6	$5.6
Income Tax Expense ($USD M)	$0.8	$1.0	$1.3
Net Earnings ($USD M)	$3.9	$3.6	$4.3
Basic EPS ($)	$0.74	$0.67	$0.82
Diluted EPS ($)	$0.72	$0.65	$0.79
Net Interest Margin (%)	3.33%	3.39%	3.51%
Return on Avg Assets (%)	0.96%	0.85%	1.07%
Return on Avg Equity (%)	13.51%	10.77%	13.52%

Non-Interest Income Composition

Metric	Q1 2024	Q4 2024	Q1 2025
Service Charges ($USD K)	$1,340	$1,452	$1,412
Appraisal Mgmt Fee Income ($USD K)	$2,414	$3,023	$3,042
Miscellaneous ($USD K)	$1,803	$2,062	$1,629
Total Non-Interest Income ($USD K)	$6,038	$7,061	$6,529

Balance Sheet & KPIs

Metric	Q1 2024	Q4 2024	Q1 2025
Total Assets ($USD B)	$1.67	$1.65	$1.69
Loans ($USD B)	$1.11	$1.14	$1.15
Deposits ($USD B)	$1.45	$1.48	$1.52
Core Deposits ($USD B)	$1.35	$1.34	$1.37
Core Deposits (% of Total)	90.22% (Q1 2025) / 90.17% (Q4 2024)	90.17%	90.22%
AFS Securities ($USD B)	$0.395	$0.388	$0.374
NPAs ($USD M)	$3.99	$4.81	$5.11
NPAs / Assets (%)	0.24%	0.29%	0.30%
ACL on Loans ($USD M)	$10.85	$9.995	$10.05
ACL / Loans (%)	0.98%	0.88%	0.87%
Book Value ($ per share)	$22.89	$24.64	$26.14
Cash Dividends ($ per share)	$0.35	$0.19	$0.36 (incl. special/regular)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Dividend	Q1 2025	$0.19 (Q4 2024 declared)	$0.20 declared Feb 21, 2025	Raised
Special Dividend	Q1 2025	None prior	$0.16 declared Jan 17, 2025	New
Share Repurchase	2025 Program	None prior	Authorization up to $3.0M repurchase (Mar 13, 2025)	New
Financial Guidance (revenue, margins, OpEx, tax rate)	Q1 2025	Not provided	Not provided	Maintained (no formal guidance)

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available for PEBK; thematic tracking below reflects management disclosures across earnings releases.

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Interest Rate Environment & NIM	NIM 3.35% in Q3; 3.39% in Q4; commentary tied to Fed hikes and variable-rate yields	NIM rose to 3.51%; deposit costs declined, loan yields supported	Improving margin
Appraisal Management Business	Strong volume drove NI growth (Q3, Q4)	Fee income +$628K YoY; higher appraisal volume; fee expense also up	Continued strength
Hurricane Helene Impacts	Reserve added ($669K) in Q3; reduced to $60K by year-end	Reserve removed; “minimal losses expected”	Risk resolved
Funding & Deposits (ICS shift)	Repurchase agreements moved to deposits (ICS) in 2024	Deposits up to $1.52B; core deposits stable at ~90%	Stable, growing
Asset Quality	NPAs ~0.24% at Q3/Q4; ACL/loans ~0.88–0.94%	NPAs 0.30%; ACL/loans 0.87%	Slight NPA uptick
Taxes/Regulatory	Deferred tax asset revaluation impacted Q3; effective rate ~21.9–22.4% FY/Q4	ETR 22.85%; prior-year tax deposit interest affected YoY comps	Normalizing ETR

Management Commentary

“Net earnings were $4.3 million or $0.82 per share and $0.79 per diluted share... [driven by] increases in net interest income and non-interest income, which were partially offset by an increase in the provision for credit losses and an increase in non-interest expense” — William D. Cable, Sr., President & CEO .
“The increase in interest income is primarily due to a $878,000 increase in interest income and fees on loans... [while] interest expense decreased... due to a decrease in rates paid on interest-bearing liabilities” .
“Minimal losses are expected as a result of Hurricane Helene” following removal of the $60,000 reserve .
“The Board’s decision to repurchase stock was based on the strength of the Company’s balance sheet and capital position. We believe this is an appropriate way to utilize capital and enhance shareholder value” — William D. Cable, Sr. (Stock repurchase authorization) .

Q&A Highlights

No Q1 2025 earnings call transcript or Q&A was available for PEBK in our document set or public transcripts; management disclosures were provided via the 8-K press release and corporate press releases .

Estimates Context

S&P Global consensus estimates appeared unavailable for PEBK’s Q1 2025 EPS and revenue; no consensus figures were returned for EPS, and revenue consensus was not provided. Therefore, formal beat/miss versus Wall Street consensus cannot be assessed for this quarter. Values retrieved from S&P Global.*

Key Takeaways for Investors

Earnings quality improved with NIM expansion and higher loan-driven interest income; operating leverage benefited from lower sequential OPEX vs Q4 despite appraisal-related expenses .
Balance sheet growth continued: loans to $1.15B and deposits to $1.52B; core deposits (~90%) underpin funding stability and margin durability .
Asset quality remains strong despite a modest NPA increase; ACL coverage of NPAs (~197%) and ACL/loans (0.87%) suggest adequate reserving in current macro and loan-mix context .
Capital return is a near-term catalyst: $3.0M buyback authorization and increased regular dividend to $0.20, plus a $0.16 special dividend support total shareholder yield and book value accretion ($26.14) .
Watch the appraisal management fee line: a key driver of non-interest income, but with matching expense sensitivity; volume trends are critical to net contribution .
Tax expense/ETR normalized higher vs prior year due to prior-year items; this should be considered in forward earnings modeling .
With limited Street coverage, trading may hinge on company disclosures and local/regional banking sentiment; near-term stock reaction likely tied to buyback activity, dividend support, and continued margin resilience .

Notes: All quantitative data and statements are sourced from company filings and press releases as cited. Where Wall Street consensus was not available, we explicitly noted unavailability. Values retrieved from S&P Global.*

PEOPLES BANCORP OF NORTH CAROLINA INC (PEBK)·Q1 2025 Earnings Summary