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Why Peoples Bancorp of North Carolina, Inc.’s (NASDAQ:PEBK) Risk Control Makes It Attractive
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Post-GFC recovery has led to improving credit quality and a strong growth environment for the banking sector. Economic growth impacts the stability of salaries and interest rate level which in turn affects borrowers’ demand for, and ability to repay, their loans. As a small-cap bank with a market capitalisation of US$167m, Peoples Bancorp of North Carolina, Inc.’s (NASDAQ:PEBK) profit and value are directly affected by economic activity. Risk associate with repayment is measured by the level of bad debt which is an expense written off Peoples Bancorp of North Carolina’s bottom line. Today I will take you through some bad debt and liability measures to analyse the level of risky assets held by the bank. Looking through a risk-lens is a useful way to assess the attractiveness of Peoples Bancorp of North Carolina's a stock investment.
See our latest analysis for Peoples Bancorp of North Carolina

Does Peoples Bancorp of North Carolina Understand Its Own Risks?
Peoples Bancorp of North Carolina’s ability to forecast and provision for its bad loans indicates it has a good understanding of the level of risk it is taking on. If the bank provisions for more than 100% of the bad debt it actually writes off, then it is considered to be relatively prudent and accurate in its bad debt provisioning. Given its high bad loan to bad debt ratio of 194.48% Peoples Bancorp of North Carolina has cautiously over-provisioned 94.48% above the appropriate minimum, indicating a safe and prudent forecasting methodology, and its ability to anticipate the factors contributing to its bad loan levels.
What Is An Appropriate Level Of Risk?
Peoples Bancorp of North Carolina’s operations expose it to risky assets by lending to borrowers who may not be able to repay their loans. Typically, loans that are “bad” and cannot be recuperated by the bank should comprise less than 3% of its total loans. Bad debt is written off as expenses when loans are not repaid which directly impacts Peoples Bancorp of North Carolina’s bottom line. The bank's bad debt only makes up a very small 0.41% to total debt which means means the bank has very strict bad debt management and faces insignificant levels of default.How Big Is Peoples Bancorp of North Carolina’s Safety Net?

Next Steps:
PEBK's acquisition will impact the business moving forward. Keep an eye on how this decision plays out in the future, especially on its financial health and earnings growth. I’ve bookmarked PEBK’s company page on Simply Wall St to stay informed with changes in outlook and valuation. This is also the source of data for this article. The three main sections I’d recommend you check out are:
- Future Outlook: What are well-informed industry analysts predicting for PEBK’s future growth? Take a look at our free research report of analyst consensus for PEBK’s outlook.
- Valuation: What is PEBK worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether PEBK is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
About NasdaqGM:PEBK
Peoples Bancorp of North Carolina
Operates as the bank holding company for Peoples Bank that provides various banking products and services for individuals and small-to medium-sized businesses in the United States.
Flawless balance sheet and good value.
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