# PEOPLES BANCORP OF NORTH CAROLINA INC (PEBK)

Informational only - not investment advice.

CIK: 0001093672
SIC: 6022 State Commercial Banks
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6022 State Commercial Banks](/industry/6022/)
Latest 10-K filed: 2026-03-11
SEC page: https://www.sec.gov/edgar/browse/?CIK=1093672
Filing source: https://www.sec.gov/Archives/edgar/data/1093672/000165495426002154/pebk_10k.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-03-11 · accession 0001654954-26-002154 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001093672.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 83,618,000 USD | 2025 | verified |
| Net income | 19,830,000 USD | 2025 | verified |
| Assets | 1,702,148,000 USD | 2025 | verified |
| Free cash flow | 19,960,000 USD | 2025 | computed |
| Net margin | 23.71% | 2025 | computed |
| Revenue YoY | +3.57% | 2025 | computed |
| ROE | 12.62% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | PEBK | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 23.7% | 21.9% | 61 | 149 |
| Revenue growth | 3.6% | 6.0% | 40 | 148 |
| FCF margin | 23.9% | 23.8% | 51 | 133 |
| ROE | 12.6% | 9.6% | 82 | 149 |
| ROA | 1.2% | 1.1% | 61 | 149 |
| Liabilities / equity | 9.83 | 8.04 | 80 | 149 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6022 State Commercial Banks, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 83618000 | USD | 2025 | 2026-03-11 |
| Net income | 19830000 | USD | 2025 | 2026-03-11 |
| Assets | 1702148000 | USD | 2025 | 2026-03-11 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001093672.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 39,809,000 | 41,949,000 | 45,350,000 | 49,601,000 | 47,958,000 | 47,179,000 | 54,431,000 | 71,862,000 | 80,733,000 | 83,618,000 |
| Net income | 9,177,000 | 10,268,000 | 13,382,000 | 14,067,000 | 11,357,000 | 15,133,000 | 16,123,000 | 15,546,000 | 16,353,000 | 19,830,000 |
| Diluted EPS | 1.50 | 1.69 | 2.22 | 2.36 | 1.95 | 2.63 | 2.85 | 2.77 | 2.98 | 3.62 |
| Operating cash flow | 12,239,000 | 18,594,000 | 17,187,000 | 13,197,000 | 9,162,000 | 26,900,000 | 22,616,000 | 22,780,000 | 20,558,000 | 21,373,000 |
| Capital expenditures | 1,610,000 | 5,557,000 | 1,742,000 | 2,835,000 | 2,492,000 | 484,000 | 4,563,000 | 1,948,000 | 587,000 | 1,413,000 |
| Dividends paid | 2,106,000 | 2,629,000 | 3,133,000 | 3,939,000 | 4,392,000 | 3,793,000 | 4,935,000 | 5,108,000 | 5,047,000 | 5,247,000 |
| Share buybacks |  |  |  |  | 2,999,000 | 3,605,000 | 710,000 | 1,997,000 | 1,998,000 | 0.00 |
| Assets | 1,087,991,000 | 1,092,166,000 | 1,093,251,000 | 1,154,882,000 | 1,416,175,000 | 1,624,193,000 | 1,620,927,000 | 1,635,910,000 | 1,651,962,000 | 1,702,148,000 |
| Liabilities | 980,563,000 | 976,191,000 | 969,634,000 | 1,020,762,000 | 1,276,276,000 | 1,481,824,000 | 1,515,732,000 | 1,514,894,000 | 1,521,399,000 | 1,545,030,000 |
| Stockholders' equity | 107,428,000 | 115,975,000 | 123,617,000 | 134,120,000 | 139,899,000 | 142,369,000 | 105,195,000 | 121,016,000 | 130,563,000 | 157,118,000 |
| Cash and cash equivalents | 70,094,000 | 57,304,000 | 43,370,000 | 52,387,000 | 161,580,000 | 277,499,000 | 71,596,000 | 82,375,000 | 59,266,000 | 58,105,000 |
| Free cash flow | 10,629,000 | 13,037,000 | 15,445,000 | 10,362,000 | 6,670,000 | 26,416,000 | 18,053,000 | 20,832,000 | 19,971,000 | 19,960,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 23.05% | 24.48% | 29.51% | 28.36% | 23.68% | 32.08% | 29.62% | 21.63% | 20.26% | 23.71% |
| Return on equity | 8.54% | 8.85% | 10.83% | 10.49% | 8.12% | 10.63% | 15.33% | 12.85% | 12.52% | 12.62% |
| Return on assets | 0.84% | 0.94% | 1.22% | 1.22% | 0.80% | 0.93% | 0.99% | 0.95% | 0.99% | 1.16% |
| Liabilities / equity | 9.13 | 8.42 | 7.84 | 7.61 | 9.12 | 10.41 | 14.41 | 12.52 | 11.65 | 9.83 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001093672.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 0.93 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.56 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.85 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 18,306,000 | 4,127,000 | 0.74 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 19,156,000 | 3,440,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 19,810,000 | 3,948,000 | 0.72 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 20,070,000 | 4,888,000 | 0.89 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 20,467,000 | 3,958,000 | 0.72 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 20,386,000 | 3,559,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 19,970,000 | 4,345,000 | 0.79 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 20,720,000 | 5,160,000 | 0.95 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 21,405,000 | 3,692,000 | 0.67 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 21,523,000 | 6,633,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 20,876,000 | 4,398,000 | 0.80 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 21,526,000 | 5,234,000 | 0.96 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from PEBK's latest 10-K: [/company/PEBK/business/](/company/PEBK/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from PEBK's latest 10-K: [/company/PEBK/risk-factors/](/company/PEBK/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1093672/000165495426007234/pebk_10q.htm

Extracted from a later financial-section MD&A body after Item 2 boundaries were low-confidence.
Confidence: high
Filing date: 2026-08-04
Report date: 2026-06-30

Management’s discussion and analysis of earnings and related data are presented to assist in understanding the consolidated financial condition and results of operations of the Company. The Company is the parent company of the Bank and a registered bank holding company operating under the supervision of the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Bank is a North Carolina-chartered bank, with offices in Catawba, Lincoln, Alexander, Mecklenburg, Iredell, Rowan and Forsyth counties, operating under the banking laws of North Carolina and the rules and regulations of the Federal Deposit Insurance Corporation (the “FDIC”).

Overview

Our business consists principally of attracting deposits from the general public and investing these funds in commercial loans, real estate mortgage loans, real estate construction loans and consumer loans. Our profitability depends primarily on our net interest income, which is the difference between the income we receive on our loan and investment securities portfolios and our cost of funds, which consists of interest paid on deposits and borrowed funds. Net interest income also is affected by the relative amounts of our interest-earning assets and interest-bearing liabilities. When interest-earning assets approximate or exceed interest-bearing liabilities, a positive interest rate spread will generate net interest income. Our profitability is also affected by the level of other income and operating expenses. Other income consists primarily of miscellaneous fees related to our loans and deposits, mortgage banking income and commissions from sales of annuities and mutual funds. Operating expenses consist of compensation and benefits, occupancy related expenses, federal deposit and other insurance premiums, data processing, advertising and other expenses.

Our operations are influenced significantly by local economic conditions and by policies of financial institution regulatory authorities. The earnings on our assets are influenced by the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve, inflation, interest rates, market and monetary fluctuations. Lending activities are affected by the demand for commercial and other types of loans, which in turn is affected by the interest rates at which such financing may be offered. Our cost of funds is influenced by interest rates on competing investments and by rates offered on similar investments by competing financial institutions in our market area, as well as general market interest rates. These factors can cause fluctuations in our net interest income and other income. In addition, local economic conditions can impact the credit risk of our loan portfolio, in that (1) local employers may be required to eliminate employment positions of individual borrowers, and (2) small businesses and commercial borrowers may experience a downturn in their operating performance and become unable to make timely payments on their loans. Management evaluates these factors in estimating the allowance for credit losses (“ACL”, “allowance for credit losses”, or “allowance”) and changes in these economic factors could result in increases or decreases to the provision for loan losses.

The Federal Reserve Federal Open Market Committee (“FOMC”) increased the target federal funds rate 500 basis points between March 2022 and July 2023 to address the supply-chain disruption and rising inflation that had developed in the markets. The target federal funds rate was lowered 175 basis points between September 2024 and December 2025 to a range of 3.50% to 3.75% at June 30, 2026. We believe that economic conditions in our market area continue to be relatively stable and as a result businesses in our market area continue to grow and invest. Our experience is that the uncertainty expressed in the national and international markets through the primary economic indicators of activity are not as pronounced in our local market, and as a result we expect continued moderate economic growth in our market area.

Although we are unable to control the external factors that influence our business, by maintaining high levels of balance sheet liquidity, managing our interest rate exposures and by actively monitoring asset quality, we seek to minimize the potentially adverse risks of unforeseen and unfavorable economic trends. Because the assets and liabilities of a bank are primarily monetary in nature (payable in fixed, determinable amounts), the performance of a bank is affected more by changes in interest rates than by inflation. Interest rates generally increase as the rate of inflation increases, but the magnitude of the change in rates may not be the same. The effect of inflation on banks is normally not as significant as its influence on those businesses that have large investments in plants and inventories. During periods of high inflation there are normally corresponding increases in the money supply, and banks will normally experience above average growth in assets, loans, and deposits. Also, general increases in the price of goods and services can be expected to result in increased operating expenses.

[[GREPCENT_TABLE]]
[["29"],["Table of Contents"]]
[[/GREPCENT_TABLE]]

Our business emphasis has been and continues to be to operate as a well-capitalized, profitable and independent community-oriented financial institution dedicated to providing quality customer service. We are committed to meeting the financial needs of the communities in which we operate. We expect growth to be achieved in our local markets and through expansion opportunities in contiguous or nearby markets. While we would be willing to consider growth by acquisition in certain circumstances, we do not consider the acquisition of another company to be necessary for our continued ability to provide a reasonable return to our shareholders. We believe that we can be more effective in serving our customers than many of our non-local competitors because of our ability to quickly and effectively provide senior management responses to customer needs and inquiries. Our ability to provide these services is enhanced by the stability and experience of our Bank officers and managers.

Summary of Critical Accounting Policies

The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of specific accounting guidance. A complete description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2025 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the 2026 Annual Meeting of Shareholders. There have been no significant changes to the application of significant accounting policies since December 31, 2025.

Results of Operations

Summary. Net earnings were $5.2 million or $0.98 per share and $0.96 per diluted share for the three months ended June 30, 2026, compared to $5.2 million or $0.97 per share and $0.95 per diluted share for the prior year period. The increase in second quarter net earnings is primarily attributable to an increase in net interest income, which was partially offset by an increase in the provision for credit losses, a decrease in non-interest income and an increase in non-interest expense, compared to the prior year period, as discussed below.

Net earnings were $9.6 million or $1.81 per share and $1.76 per diluted share for the six months ended June 30, 2026, compared to $9.5 million or $1.79 per share and $1.74 per diluted share for the same period one year ago. The increase in year-to-date net earnings is primarily attributable to an increase in net interest income, which was partially offset by an increase in the provision for credit losses, a decrease in non-interest income and an increase in non-interest expense, compared to the prior year period, as discussed below.

The annualized return on average assets was 1.13% for the six months ended June 30, 2026, compared to 1.15% for the same period one year ago, and annualized return on average shareholders’ equity was 12.22% for the six months ended June 30, 2026, compared to 14.06% for the same period one year ago.

Net Interest Income. Net interest income, the major component of the Company’s net income, is the amount by which interest and fees generated by interest-earning assets exceed the total cost of funds used to carry them. Net interest income is affected by changes in the volume and mix of interest-earning assets and interest-bearing liabilities, as well as changes in the yields earned and rates paid. Net interest margin is calculated by dividing tax-equivalent net interest income by average interest-earning assets, and represents the Company’s net yield on its interest-earning assets.

Net interest income was $16.0 million for the three months ended June 30, 2026, compared to $14.6 million for the three months ended June 30, 2025. The increase in net interest income is due to a $806,000 increase in interest income and a $565,000 decrease in interest expense. Net interest income after the provision for credit losses was $15.7 million for the three months ended June 30, 2026, compared to $14.8 million for the three months ended June 30, 2025. The provision for credit losses for the three months ended June 30, 2026 was $293,000, compared to a recovery of $213,000 for the three months ended June 30, 2025. The increase in the provision for credit losses reflects continued growth in total loans, which increased $36.3 million during the three months ended June 30, 2026, compared to an increase of $5.9 million during the three months ended June 30, 2025. Additionally, the increase in the provision for credit losses includes a $29,000 increase in net charge-offs during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

[[GREPCENT_TABLE]]
[["30"],["Table of Contents"]]
[[/GREPCENT_TABLE]]

Interest income was $21.5 million for the three months ended June 30, 2026, compared to $20.7 million for the three months ended June 30, 2025. The increase in interest income is primarily due to a $1.5 million increase in interest income and fees on loans, which was partially offset by a $511,000 decrease in interest income on balances due from banks and a $231,000 decrease in interest income on investment securities. The increase in interest income and fees on loans is primarily due to an increase in total loans. The decrease in interest income on balances due from banks is due to a decrease in average balances outstanding and rate decreases implemented by the FOMC. The decrease in interest income on investment securities is due to a reduction in balances outstanding and decreases in yields on variable rate securities. During the three months ended June 30, 2026, average loans were $1.25 billion, an increase of $96.2 million from average loans of $1.16 billion for the three months ended June 30, 2025. During the three months ended June 30, 2026, average investment securities were $411.2 million, a decrease of $7.8 million from average investment securities of $419.0 million for the three months ended June 30, 2025. The average yield on loans for the three months ended June 30, 2026 and 2025 was 5.83% and 5.78%, respectively. The average yield on investment securities available for sale was 3.03% and 3.21% for the three months ended June 30, 2026 and 2025, respectively. The average yield on earning assets was 5.12% and 5.07% for the three months ended June 30, 2026 and 2025, respectively.

Interest expense was $5.6 million for the three months ended June 30, 2026, compared to $6.1 million for the three months ended June 30, 2

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1093672/000165495426002154/pebk_10k.htm
Complete FY 2025 MD&A: /company/PEBK/mda/fy2025/

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Published MD&A gate trimmed front/tail over-capture. Source document followed from filing index: pebk_ex13.htm.
Confidence: high
Filing date: 2026-03-11
Report date: 2025-12-31

Management’s discussion and analysis of earnings and related data are presented to assist in understanding the consolidated financial condition and results of operations of the Company, for the years ended December 31, 2025 and 2024. The Company is a registered bank holding company operating under the supervision of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the parent company of the “Bank. The Bank is a North Carolina-chartered bank, with offices in Catawba, Lincoln, Alexander, Mecklenburg, Iredell, Rowan and Forsyth counties, operating under the banking laws of North Carolina and the rules and regulations of the Federal Deposit Insurance Corporation (the “FDIC”).

Overview

Our business consists principally of attracting deposits from the general public and investing these funds in commercial loans, real estate mortgage loans, real estate construction loans and consumer loans. Our profitability depends primarily on our net interest income, which is the difference between the income we receive on our loan and investment securities portfolios and our cost of funds, which consists of interest paid on deposits and borrowed funds. Net interest income also is affected by the relative amounts of our interest-earning assets and interest-bearing liabilities. When interest-earning assets approximate or exceed interest-bearing liabilities, a positive interest rate spread will generate net interest income. Our profitability is also affected by the level of other income and operating expenses. Other income consists primarily of miscellaneous fees related to our loans and deposits, mortgage banking income and commissions from sales of annuities and mutual funds. Operating expenses consist of compensation and benefits, occupancy related expenses, federal deposit and other insurance premiums, data processing, advertising and other expenses.

Our operations are influenced significantly by local economic conditions and by policies of financial institution regulatory authorities. The earnings on our assets are influenced by the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve, inflation, interest rates, market and monetary fluctuations.  Lending activities are affected by the demand for commercial and other types of loans, which in turn is affected by the interest rates at which such financing may be offered.  Our cost of funds is influenced by interest rates on competing investments and by rates offered on similar investments by competing financial institutions in our market area, as well as general market interest rates. These factors can cause fluctuations in our net interest income and other income. In addition, local economic conditions can impact the credit risk of our loan portfolio, in that (1) local employers may be required to eliminate employment positions of individual borrowers, and (2) small businesses and commercial borrowers may experience a downturn in their operating performance and become unable to make timely payments on their loans. Management evaluates these factors in estimating the allowance for credit losses (“ACL”, “allowance for credit losses”, or “allowance”) and changes in these economic factors could result in increases or decreases to the provision for loan losses.

The Federal Reserve Federal Open Market Committee (“FOMC”) increased the target federal funds rate 500 basis points between March 2022 and July 2023 to address the supply-chain disruption and rising inflation that had developed in the markets.  In 2024, the FOMC reduced the target federal funds rate to a range of 4.25% to 4.50%.  As of December 31, 2025, the target federal funds rate had been lowered to a range of 3.50% to 3.75%.  We believe that economic conditions in our market area continue to be relatively stable and as a result businesses in our market area continue to grow and invest.  Our experience is that the uncertainty expressed in the national and international markets through the primary economic indicators of activity are not as pronounced in our local market, and as a result we expect continued moderate economic growth in our market area.

Although we are unable to control the external factors that influence our business, by maintaining high levels of balance sheet liquidity, managing our interest rate exposures and by actively monitoring asset quality, we seek to minimize the potentially adverse risks of unforeseen and unfavorable economic trends.  Because the assets and liabilities of a bank are primarily monetary in nature (payable in fixed, determinable amounts), the performance of a bank is affected more by changes in interest rates than by inflation. Interest rates generally increase as the rate of inflation increases, but the magnitude of the change in rates may not be the same.  The effect of inflation on banks is normally not as significant as its influence on those businesses that have large investments in plants and inventories.  During periods of high inflation there are normally corresponding increases in the money supply, and banks will normally experience above average growth in assets, loans, and deposits.  Also, general increases in the price of goods and services can be expected to result in increased operating expenses.

A-4

Our business emphasis has been and continues to be to operate as a well-capitalized, profitable and independent community-oriented financial institution dedicated to providing quality customer service. We are committed to meeting the financial needs of the communities in which we operate. We expect growth to be achieved in our local markets and through expansion opportunities in contiguous or nearby markets.  While we would be willing to consider growth by acquisition in certain circumstances, we do not consider the acquisition of another company to be necessary for our continued ability to provide a reasonable return to our shareholders.  We believe that we can be more effective in serving our customers than many of our non-local competitors because of our ability to quickly and effectively provide senior management responses to customer needs and inquiries. Our ability to provide these services is enhanced by the stability and experience of our Bank officers and managers.

The Company does not have specific plans to open additional offices in 2026, but will continue to look for and consider growth opportunities in nearby markets.

Summary of Critical Accounting Policies

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiary, the Bank, along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc., Real Estate Advisory Services, Inc., Community Bank Real Estate Solutions, LLC and PB Real Estate Holdings, LLC. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. The following is a summary of the Company’s critical accounting policy, which is the most subjective and complex accounting policies of the Company. A more complete description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2025 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 7, 2026 Annual Meeting of Shareholders.

The allowance for credit losses 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 for credit losses that management believes will be adequate in light of anticipated risks and loan losses.

The collectability of loans is reflected through the Company’s estimate of the allowance for credit losses. The Company performs periodic and systematic detailed reviews of its lending portfolio to assess overall collectability. The Company’s internal models generally involve present value of cash flow techniques. The various techniques are discussed in greater detail elsewhere in this management’s discussion and analysis and the Notes to Consolidated Financial Statements.

Management of the Company has made a number of estimates and assumptions relating to reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the accompanying consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates.

Results of Operations

Summary.  The Company reported net earnings of $19.8 million or $3.74 per share and $3.62 per diluted share for the year ended December 31, 2025, as compared to $16.4 million or $3.08 per share and $2.98 per diluted share for the year ended December 31, 2024. The increase in net earnings is primarily attributable to 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, compared to the prior year, as discussed below. 

The return on average assets for the year ended December 31, 2025 was 1.17%, as compared to 0.99% for the year ended December 31, 2024. The return on average shareholders’ equity was 13.33% for the year ended December 31, 2025, as compared to 12.59% for the year ended December 31, 2024.

Net Interest Income.  Net interest income, the major component of the Company’s net income, is the amount by which interest and fees generated by interest-earning assets exceed the total cost of funds used to carry them.  Net interest income is affected by changes in the volume and mix of interest-earning assets and interest-bearing liabilities, as well as changes in the yields earned and rates paid.  Net interest margin is calculated by dividing tax-equivalent net interest income by average interest-earning assets, and represents the Company’s net yield on its interest-earning assets.

A-5

Net interest income was $59.0 million for the year ended December 31, 2025, compared to $54.1 million for the year ended December 31, 2024.  The increase in net interest income is due to a $2.9 million increase in interest income and a $2.1 million decrease in interest expense.  The increase in interest income is primarily due to a $4.3 million increase in interest income and fees on loans and a $44,000 increase in interest income on balances due from banks, which was partially offset by a $1.5 million decrease in interest income on investment securities.  The increase in interest income and fees on loans is primarily due to an increase in total loans.  The increase in interest income on balances due from banks is primarily due to an increase in average balances outstanding.  The decrease in interest income on investment securities is due to a reduction in balances outstanding and decreases in yields on variable rate securities.  The decrease in interest expense is primarily due to a decrease in rates paid on interest-bearing liabilities resulting from rate decreases implemented by the Federal Reserve. 

Table 1 sets forth for each category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding, the interest incurred on such amounts and the average rate earned or incurred for the years ended December 31, 2025 and 2024. The table also sets forth the average rate earned on total interest-earning assets, the average rate paid on total interest-bearing liabilities, and the net yield on total average interest-earning assets for the same periods.  Yield information does not give effect to changes in fair value of available for sale investment securities that are reflected as a component of shareholders’ equity.  Yiel

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/PEBK/mda/fy2025/
All MD&A years: /company/PEBK/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/PEBK/mda/fy2024/): filed 2025-03-12; accession 0001654954-25-002689 (https://www.sec.gov/Archives/edgar/data/1093672/000165495425002689/pebk_10k.htm)
- [FY 2023 MD&A](/company/PEBK/mda/fy2023/): filed 2024-03-07; accession 0001654954-24-002793 (https://www.sec.gov/Archives/edgar/data/1093672/000165495424002793/pebk_10k.htm)
- [FY 2022 MD&A](/company/PEBK/mda/fy2022/): filed 2023-03-17; accession 0001654954-23-003112 (https://www.sec.gov/Archives/edgar/data/1093672/000165495423003112/pebk_10k.htm)
- [FY 2021 MD&A](/company/PEBK/mda/fy2021/): filed 2022-03-18; accession 0001654954-22-003418 (https://www.sec.gov/Archives/edgar/data/1093672/000165495422003418/pebk_10k.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 6022 State Commercial Banks) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity

Macro-to-micro threads including this sector: [Interest rates & the Fed](/thread/interest-rates-fed/), [Money & trade](/thread/money-trade/), [Consumer & credit](/thread/consumer-credit/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/PEBK.md · JSON record: /company/PEBK.json · verified financials: /company/PEBK/financials.json / /company/PEBK/financials.csv · machine TOC for the whole site: /llms.txt