PEOPLES BANCORP OF NORTH CAROLINA INC
For the period ended Dec 31, 2025. Filed Mar 11, 2026.
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FY2025 · Filed Mar 11, 2026
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EX-13 · (5) 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 $819,000 and $817,000 for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025, the Bank had operating right of use assets of $3.5 million and operating lease liabilities of $3.6 million. As of December 31, 2024, the Bank had operating right of use assets of $4.0 million and operating lease liabilities of $4.1 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 decision on whether to include lease extension/renewal periods in lease accounting calculations is based on the judgment of management as to whether or not a lease extension/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.
The following table presents lease cost and other lease information as of December 31, 2025 and 2024.
| (Dollars in thousands) | ||
|---|---|---|
| December 31, 2025 | December 31, 2024 | |
| Operating lease cost | $823 | $840 |
| Other information: | ||
| Cash paid for amounts included in the measurement of lease liabilities | 824 | 819 |
| Operating cash flows from operating leases | - | - |
| Right-of-use assets obtained in exchange for new lease liabilities - operating leases | 263 | - |
| Weighted-average remaining lease term - operating leases | 7.37 | 7.91 |
| Weighted-average discount rate - operating leases | 2.98% | 2.80% |
A-48
The following table presents lease maturities as of December 31, 2025 and 2024.
| (Dollars in thousands) | |
|---|---|
| Maturity Analysis of Operating Lease Liabilities: | December 31, 2025 |
| 2026 | $750 |
| 2027 | 657 |
| 2028 | 515 |
| 2029 | 422 |
| 2030 | 424 |
| Thereafter | 1,270 |
| Total | 4,038 |
| Less: Imputed Interest | (423) |
| Operating Lease Liability | $3,615 |
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