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 · Limitations
Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.
The tables below present all financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy, as of December 31, 2025 and December 31, 2024.
| (Dollars in thousands) | ||||
|---|---|---|---|---|
| Fair Value Measurements | Level 1 Valuation | Level 2 Valuation | Level 3 Valuation | |
| U.S. Treasuries | $7,609 | - | 7,609 | - |
| U.S. Government sponsored enterprises | 5,202 | - | 5,202 | - |
| GSE - Mortgage-backed securities | 211,916 | - | 211,916 | - |
| Private label mortgage-backed securities | 42,062 | - | 42,062 | - |
| State and political subdivisions | 110,574 | - | 110,574 | - |
| Mutual funds held in deferred compensation trust | 2,855 | 2,855 | - | - |
| (Dollars in thousands) | ||||
|---|---|---|---|---|
| Fair Value Measurements | Level 1 Valuation | Level 2 Valuation | Level 3 Valuation | |
| U.S. Treasuries | $7,257 | - | 7,257 | - |
| U.S. Government sponsored enterprises | 8,732 | - | 8,732 | - |
| GSE - Mortgage-backed securities | 225,792 | - | 225,792 | - |
| Private label mortgage-backed securities | 41,767 | - | 41,767 | - |
| State and political subdivisions | 104,455 | - | 104,455 | - |
| Mutual funds held in deferred compensation trust | 2,726 | 2,726 | - | - |
A-58
The fair value measurements for individually evaluated loans on a non-recurring basis at December 31, 2025 and December 31, 2024 are presented below. The fair value measurement process uses certified appraisals and other market-based information; however, in many cases, it also requires significant input based on management’s knowledge of, and judgment about, current market conditions, specific issues relating to the collateral and other matters. As a result, all fair value measurements for individually evaluated loans and other real estate are considered Level 3.
| (Dollars in thousands) | ||||||
|---|---|---|---|---|---|---|
| Fair Value December 31, 2025 · Fair Value December 31, 2024 · Valuation Technique · Significant Unobservable Inputs · General Range of Significant Unobservable Input Values | ||||||
| Individually evaluated loans | $375 | $1,646 | Appraised value | Discounts to reflect current market conditions and ultimate collectability | 0 - 50% | |
| Other real estate | $ | - | $369 | Appraised value | Discounts to reflect current market conditions and estimated costs to sell | 0 - 25% |
The carrying amount and estimated fair value of financial instruments at December 31, 2025 and December 31, 2024 are as follows:
| (Dollars in thousands) | |||||
|---|---|---|---|---|---|
| Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |
| Assets: | |||||
| Cash and cash equivalents | $58,105 | 58,105 | - | - | 58,105 |
| Investment securities available for sale | 377,363 | - | 377,363 | - | 377,363 |
| Other investments | 2,595 | - | - | 2,595 | 2,595 |
| Mortgage loans held for sale | 1,136 | - | 1,136 | - | 1,136 |
| Loans, net | 1,194,262 | - | - | 1,197,371 | 1,197,371 |
| Mutual funds held in deferred compensation trust | 2,855 | 2,855 | - | - | 2,855 |
| Liabilities: | |||||
| Deposits | $1,509,225 | - | 1,511,596 | - | 1,511,596 |
| Junior subordinated debentures | 15,464 | - | 15,464 | - | 15,464 |
| (Dollars in thousands) | |||||
|---|---|---|---|---|---|
| Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |
| Assets: | |||||
| Cash and cash equivalents | $59,266 | 59,266 | - | - | 59,266 |
| Investment securities available for sale | 388,003 | - | 388,003 | - | 388,003 |
| Other investments | 2,728 | - | - | 2,728 | 2,728 |
| Mortgage loans held for sale | 1,367 | - | 1,367 | - | 1,367 |
| Loans, net | 1,128,409 | - | - | 1,123,864 | 1,123,864 |
| Mutual funds held in deferred compensation trust | 2,726 | 2,726 | - | - | 2,726 |
| Liabilities: | |||||
| Deposits | $1,484,731 | - | 1,487,475 | - | 1,487,475 |
| Junior subordinated debentures | 15,464 | - | 15,464 | - | 15,464 |
A-59
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.