UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year
ended: December 31,
2019
Peoples Bancorp of North Carolina, Inc.
( Exact Name of Registrant as Specified in
Its Charter)
North Carolina
(State or Other
Jurisdiction of Incorporation)
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000-27205
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56-2132396
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(Commission File
No.)
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(IRS Employer
Identification No.)
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518 West C Street, Newton, North Carolina
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28658
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(Address of
Principal Executive Offices)
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(Zip
Code)
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(828) 464-5620
(Registrant’s
Telephone Number, Including Area Code)
Securities
Registered Pursuant to Section 12(b) of the Act: None
Securities
Registered Pursuant to Section 12(g) of the Act:
Common Stock, no par value
Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.
Yes ☐ No ☒
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13
or Section 15(d) of the Act.
Yes ☐ No ☒
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90
days.
Yes ☒
No
☐
Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File
required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
☒ No ☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer”, “accelerated
filer”, “smaller reporting company”, and
“emerging growth company” in Rule 12b-2 of the Exchange
Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting
company☒
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Emerging growth company
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13 (a) ☐ Indicate by check
mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
☐ No ☒
State
the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant’s most recently completed second fiscal quarter.
$136,593,960 based on the closing price of such common stock on
June 30, 2019, which was $30.05 per share.
Indicate the number
of shares outstanding of each of the registrant's classes of common
stock, as of the latest practicable date.
5,914,304 shares of common stock, outstanding at February 29,
2020.
EXPLANATORY NOTE
This
Amendment No. 1 on Form 10-K/A amends the original Report on Form
10-K for the annual period ended December 31, 2019 filed by Peoples
Bancorp of North Carolina, Inc. (the “Company”) on
March 13, 2020 (the “Original Filing”). The sole
purpose of this Amendment No. 1 is to include Exhibit (4)(ii),
which was inadvertently excluded from the Original
Filing.
Except
as described above, this Amendment No. 1 does not amend, update or
change any other items or disclosures contained in the Original
Filing, and accordingly, this Amendment No. 1 does not reflect or
purport to reflect any information or events occurring after the
original filing date or modify or update those disclosures affected
by subsequent events. Accordingly, this Amendment No. 1 should be
read in conjunction with the Original Filing and the
Company’s other filings with the Securities and Exchange
Commission.
Item 15. Exhibits
The
Exhibit Index appearing immediately after the signature page to
this Form 10-K/A is incorporated herein by reference.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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Peoples Bancorp of
North Carolina, Inc.
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Date: March 16,
2020
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By:
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/s/ Lance A.
Sellers
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Lance A.
Sellers
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President and Chief
Executive Officer
(Principal
Executive Officer)
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Date: March 16,
2020
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By:
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/s/
A.
Joseph Lampron, Jr.
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A.
Joseph Lampron, Jr.
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Executive Vice
President and Chief Financial Officer
(Principal
Financial and Principal Accounting Officer)
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EXHIBIT INDEX
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Articles
of Amendment dated December 19, 2008, regarding the Series A
Preferred Stock, incorporated by reference to Exhibit (3)(1) to the
Form 8-K filed with the Securities and Exchange Commission on
December 29, 2008
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Articles
of Amendment dated February 26, 2010 incorporated by reference to
Exhibit (3)(2) to the Form 10-K filed with the Securities and
Exchange Commission on March 25, 2010
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Articles
of Incorporation of the Registrant, incorporated by reference to
Exhibit (3)(i) to the Form 8-A filed with the Securities and
Exchange Commission on September 2, 1999
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Second
Amended and Restated Bylaws of the Registrant, incorporated by
reference to Exhibit (3)(ii) to the Form 8-K filed with the
Securities and Exchange Commission on June 24, 2015
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Specimen
Stock Certificate, incorporated by reference to Exhibit (4) to the
Form 8-A filed with the Securities and Exchange Commission on
September 2, 1999
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Description
of Registrant’s Securities registered pursuant to Section 12
of the Securities Act of 1934
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Amended
and Restated Executive Salary Continuation Agreement between
Peoples Bank and Tony W. Wolfe dated December 18, 2008,
incorporated by reference to Exhibit (10)(a)(iii) to the Form 8-K
filed with the Securities and Exchange Commission on December 29,
2008
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Amended
and Restated Executive Salary Continuation Agreement between
Peoples Bank and Joseph F. Beaman, Jr. dated December 18,
2008, incorporated by reference to Exhibit (10)(b)(iii) to the Form
8-K filed with the Securities and Exchange Commission on December
29, 2008
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Amended
and Restated Executive Salary Continuation Agreement between
Peoples Bank and William D. Cable, Sr. dated December 18,
2008, incorporated by reference to Exhibit (10)(c)(iii) to the Form
8-K filed with the Securities and Exchange Commission on December
29, 2008
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Employment
Agreement dated January 22, 2015 between the Registrant and William
D. Cable, Sr., incorporated by reference to Exhibit (10)(c) to the
Form 8-K filed with the Securities and Exchange Commission on
February 9, 2015
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Amended
and Restated Executive Salary Continuation Agreement between
Peoples Bank and Lance A. Sellers dated December 18, 2008,
incorporated by reference to Exhibit (10)(d)(iii) to the Form 8-K
filed with the Securities and Exchange Commission on December 29,
2008
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Employment
Agreement dated January 22, 2015 between the Registrant and Lance
A. Sellers, incorporated by reference to Exhibit (10)(a) to the
Form 8-K filed with the Securities and Exchange Commission on
February 9, 2015
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Peoples
Bancorp of North Carolina, Inc. Omnibus Stock Ownership and Long
Term Incentive Plan incorporated by reference to Exhibit (10)(f) to
the Form 10-K filed with the Securities and Exchange Commission on
March 30, 2000
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Amendment
No. 1 to the Peoples Bancorp of North Carolina, Inc. Omnibus Stock
Ownership and Long Term Incentive Plan incorporated by reference to
Exhibit (10)(e)(i) to the Form 10-K filed with the Securities and
Exchange Commission on March 15, 2007
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Amended
and Restated Executive Salary Continuation Agreement between
Peoples Bank and A. Joseph Lampron, Jr. dated December 18,
2008, incorporated by reference to Exhibit (10)(f)(iii) to the Form
8-K filed with the Securities and Exchange Commission on December
29, 2008
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Employment
Agreement dated January 22, 2015 between the Registrant and A.
Joseph Lampron, Jr., incorporated by reference to Exhibit (10)(b)
to the Form 8-K filed with the Securities and Exchange Commission
on February 9, 2015
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Peoples
Bank Directors’ and Officers’ Deferral Plan,
incorporated by reference to Exhibit (10)(h) to the Form 10-K filed
with the Securities and Exchange Commission on March 28,
2002
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Rabbi
Trust for the Peoples Bank Directors’ and Officers’
Deferral Plan, incorporated by reference to Exhibit (10)(i) to the
Form 10-K filed with the Securities and Exchange Commission on
March 28, 2002
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Description
of Service Recognition Program maintained by Peoples Bank,
incorporated by reference to Exhibit (10)(i) to the Form 10-K filed
with the Securities and Exchange Commission on March 27,
2003
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Capital
Securities Purchase Agreement dated as of June 26, 2006, by and
among the Registrant, PEBK Capital Trust II and Bear, Sterns
Securities Corp., incorporated by reference to Exhibit (10)(j) to
the Form 10-Q filed with the Securities and Exchange Commission on
November 13, 2006
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Amended
and Restated Trust Agreement of PEBK Capital Trust II, dated as of
June 28, 2006, incorporated by reference to Exhibit (10)(k) to the
Form 10-Q filed with the Securities and Exchange Commission on
November 13, 2006
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Guarantee
Agreement of the Registrant dated as of June 28, 2006, incorporated
by reference to Exhibit (10)(l) to the Form 10-Q filed with the
Securities and Exchange Commission on November 13,
2006
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Indenture,
dated as of June 28, 2006, by and between the Registrant and
LaSalle Bank National Association, as Trustee, relating to Junior
Subordinated Debt Securities Due September 15, 2036, incorporated
by reference to Exhibit (10)(m) to the Form 10-Q filed with the
Securities and Exchange Commission on November 13,
2006
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Form of
Amended and Restated Director Supplemental Retirement Agreement
between Peoples Bank and Directors Robert C. Abernethy, James S.
Abernethy, Douglas S. Howard, John W. Lineberger, Jr., Gary E.
Matthews, Dr. Billy L Price, Jr., Larry E Robinson, W. Gregory
Terry, Dan Ray Timmerman, Sr., and Benjamin I. Zachary,
incorporated by reference to Exhibit (10)(n) to the Form 8-K filed
with the Securities and Exchange Commission on December 29,
2008
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2009
Omnibus Stock Ownership and Long Term Incentive Plan incorporated
by reference to Exhibit (10)(o) to the Form 10-K filed with the
Securities and Exchange Commission on March 20, 2009
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First
Amendment to Amended and Restated Executive Salary Continuation
Agreement between Peoples Bank and Lance A. Sellers dated February
16, 2018
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First
Amendment to Amended and Restated Executive Salary Continuation
Agreement between Peoples Bank and A. Joseph Lampron, Jr. dated
February 16, 2018
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First
Amendment to Amended and Restated Executive Salary Continuation
Agreement between Peoples Bank and William D. Cable, Sr. dated
February 16, 2018
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2019
Annual Report of Peoples Bancorp of North Carolina,
Inc.
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Code of
Business Conduct and Ethics of Peoples Bancorp of North Carolina,
Inc., incorporated by reference to Exhibit (14) to the Form 10-K
filed with the Securities and Exchange Commission on March 25,
2005
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Subsidiaries
of the Registrant
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Consent
of Elliott Davis, PLLC
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Certification
of principal executive officer pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
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Certification
of principal financial officer pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
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Certification
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
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Exhibit
(101)
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The
following materials from the Company’s 10-K Report for
the annual period ended December 31, 2019, formatted in eXtensible
Business Reporting Language (“XBRL”): (i) the
Condensed Consolidated Balance Sheets, (ii) the Condensed
Consolidated Statements of Earnings, (iii) the Condensed
Consolidated Statements of Comprehensive Income (iv) the
Condensed Consolidated Statements of Changes in Shareholders’
Equity, (v) the Condensed Consolidated Statements of Cash
Flows, and (vi) the Notes to the Condensed Consolidated
Financial Statements.
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EXHIBIT (4)(ii)
DESCRIPTION OF REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
General
As of
December 31, 2019, Peoples Bancorp of North Carolina, Inc. (the
“Company”) had one class of securities registered under
Section 12 of the Securities Exchange Act of 1934, as amended:
Common stock, no par value per share.
Securities
The authorized capital stock of the Company currently consists of
20,000,000 shares of common stock, no par value per share (the
“Common Stock”), and 5,000,000 shares of preferred
stock, no par value per share. The outstanding shares of the
Company Common Stock are duly authorized, validly issued, fully
paid, and non-assessable.
Common Stock
As of
February 29, 2020, 5,914,304 shares of common stock were issued and
outstanding. The Company’s Common Stock is listed on The
NASDAQ Global Market under the symbol
“PEBK.”
Voting Rights
Each
holder of Common Stock is entitled to one vote for each share held
of record on all matters submitted to a vote of the shareholders.
Shareholders are not entitled to cumulate their votes for the
election of directors. Directors are elected by a plurality of the
votes cast. Each director is elected to a term ending as of the
next succeeding annual meeting or until his or her earlier death,
resignation, retirement, removal or disqualification.
Liquidation Rights
In the
event of the Company’s liquidation, dissolution or winding
up, holders of Common Stock are entitled to share ratably in all
the Company’s assets remaining after payment of liabilities,
including but not limited to the Company’s outstanding
subordinate debentures, and the liquidation preference of any then
outstanding preferred shares. Because the Company is a bank holding
company, its rights and the rights of its creditors and
shareholders to receive the assets of any subsidiary upon
liquidation or recapitalization may be subject to prior claims of
the subsidiary’s creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the
subsidiary.
Dividends
Holders
of the Company’s Common Stock are entitled to receive ratably
such dividends as may be declared by the Company’s Board of
Directors out of legally available funds. The ability of the Board
of Directors to declare and pay dividends on Common Stock is
subject to the terms of applicable North Carolina law and banking
regulations. The Company’s principal source of income is
dividends that are declared and paid by the Peoples Bank on its
capital stock. Therefore, the ability of the Company to pay
dividends is dependent upon the receipt of dividends from Peoples
Bank. North Carolina commercial banks, such as Peoples Bank, are
subject to legal limitations on the amounts of dividends they are
permitted to pay. Peoples Bank may pay dividends from undivided
profits, which are determined by deducting and charging certain
items against actual profits, including any contributions to
surplus required by North Carolina law. Also, an insured depository
institution, such as Peoples Bank, is prohibited from making
capital distributions, including the payment of dividends, if,
after making such distribution, the institution would become
“undercapitalized,” as such term is defined in the
applicable law and regulations. Also, the Company may not pay
dividends on its capital stock if it is in default or has elected
to defer payments of interest under its junior subordinated
debentures. The declaration and payment of future dividends to
holders of its Common Stock will also depend upon the
Company’s earnings and financial condition, the capital
requirements of its subsidiaries, regulatory conditions and other
factors as the Board of Directors may deem relevant.
Anti-Takeover Provisions
Board of Directors. The Company’s
Articles of Incorporation and Bylaws provide that the number of
directors shall not be less than five or more than 15. The number
of directors currently is ten, but such number may be changed by
resolution of the Company’s Board of Directors. These
provisions have the effect of enabling the Company’s Board of
Directors to elect directors friendly to management in the event of
a non-negotiated take-over attempt and may make it more difficult
for a person seeking to acquire control of the Company to gain
majority representation on the Company’s Board of Directors
in a relatively short period of time. Pursuant to North Carolina
law and the Company’s Bylaws, directors are elected by a
plurality vote in contested and uncontested elections.
Cumulative Voting. The Company’s
Articles of Incorporation do not provide for cumulative voting for
any purpose. Cumulative voting in election of directors entitles a
shareholder to cast a total number of votes equal to the number of
directors to be elected multiplied by the number of his or her
shares and to distribute that number of votes among such number of
nominees as the shareholder chooses. The absence of cumulative
voting for directors limits the ability of a minority shareholder
to elect directors. Because the holder of less than a majority of
the shares of the Company’s Common Stock cannot be assured
representation the Board of Directors, the absence of cumulative
voting may discourage accumulations of shares of the
Company’s Common Stock or proxy contests that would result in
changes in the Company's management.
Special Meetings. The Company’s
Bylaws provide that special meetings of shareholders may be called
by the Chairman of the Board, the Chief Executive Officer, the
President, or by the Board of Directors. If a special meeting is
not called by such persons or entities, shareholder proposals
cannot be presented to the shareholders for action until the next
annual meeting.
Preemptive Rights. The Company’s
Articles of Incorporation do not provide for preemptive rights with
respect to any shares which may be issued by the
Company.
Capital Stock. The Company’s
Articles of Incorporation authorize the issuance of 20,000,000
shares of Common Stock and 5,000,000 shares of preferred stock.
This provides the Board of Directors with flexibility to issue
additional shares, without further shareholder approval except as
expressly required by applicable stock exchange listing standards,
for proper corporate purposes, including financings, acquisitions,
stock dividends, stock splits, employee stock options and other
appropriate purposes. However, issuance of additional authorized
shares may also have the effect of impeding or deterring future
attempts to gain control of the Company. Subject to certain
restrictions established to protect the holders of the preferred
shares, the Company’s Board of Directors also has sole
authority to determine the terms of any one or more series of
preferred stock, including voting rights, conversion rates,
dividend rights, and liquidation preferences, which could adversely
affect the voting power of the holders of the Common Stock and
discourage an attempt to acquire control of the Company. The
Company’s Board of Directors has the power, to the extent
consistent with its fiduciary duties, to issue preferred stock to
persons friendly to management or otherwise in order to impede
attempts by third parties to acquire voting control of the Company
and to impede other transactions not favored by
management.
Director Nominations. The
Company’s Bylaws require a shareholder who intends to
nominate a candidate for election to the Board of Directors at a
shareholders’ meeting to give written notice to
Company’s Secretary at least 50 days (but not more than 90
days) in advance of the date of the meeting at which such
nomination will be made; provided, however, that if less than 60
days’ notice of the meeting is given to shareholders, such
nominations must be delivered to the Company’s Secretary no
later than the close of business on the 10th day following the
day on which notice of the meeting was mailed.
Supermajority Voting Provisions. The
Company’s Articles of Incorporation require the affirmative
vote of 75% of the outstanding shares entitled to vote to approve a
merger, combination, or other Business Combination (as defined in
the Company’s Articles of Incorporation), unless the
transaction is approved, prior to consummation, by the Board of
Directors, by the vote of at least 75% of the Whole Board of
Directors (as defined in the Company’s Articles of
Incorporation) and, if the Business Combination is proposed by a
Related Person (as defined in the Company’s Articles of
Incorporation), by at least 75% of the Continuing Directors (as
defined in the Company’s Articles of Incorporation) of the
Board of Directors. This provision could tend to make the
acquisition of the Company more difficult to accomplish without the
cooperation or favorable recommendation of the Company’s
Board of Directors. When evaluating such Business Combinations, the
Board of Directors will consider (i) the social and economic
effects of acceptance of such an offer on the Company’s
depositors, borrowers, other customers, employees, and creditors of
the Company and its subsidiaries, and on the communities in which
the Company and its subsidiaries operate or are located; (ii) the
Company’s ability, and the ability of its subsidiaries, to
fulfill the objectives of a bank holding company and of commercial
banking entities, as applicable, under applicable federal and state
statutes and regulations; (iii) the business and financial
condition and prospects and earnings prospects of the person or
group proposing the combination, including, but not limited to,
debt service and other existing financial obligations, financial
obligations to be incurred in connection with the combination, and
other likely financial obligations of such person or group, and the
possible effect of such conditions and prospects upon the Company
and its subsidiaries and the communities in which the Company and
its subsidiaries are located; (iv) the competence, experience, and
integrity of the person or group proposing the combination and its
or their management; and (v) the prospects for successful
conclusion of the proposed combination.
Change in Control Regulations. Federal
law requires the approval of the Federal Reserve prior to any
person or entity, or any persons or entities acting in concert,
acquiring 10% or more of the Company’s common stock, and
prior to certain other actions that are deemed pursuant to
regulations of the Federal Reserve to constitute control. In
addition, North Carolina law requires the approval of the
Commissioner prior to acquiring control of a North Carolina
bank.
Transfer Agent and Registrar
The
transfer agent and registrar of the Company’s Common Stock is
Broadridge Corporate Issuer Solutions, Inc.