Core Points - Peoples Bancorp of North Carolina, Inc. declared a regular cash dividend of $0.19 per share for the second quarter of 2024 [1] - The dividend will be paid on June 14, 2024, to shareholders of record on June 3, 2024 [1] Company Overview - Peoples Bank, a wholly-owned subsidiary of Peoples Bancorp of North Carolina, operates 17 banking offices in North Carolina, specifically in Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake Counties [3] - The bank also has loan production offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties [3] - The company's common stock is publicly traded on the Nasdaq Global Market under the symbol "PEBK" [3]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ 000-27205 (Commission File No.) Peoples Bancorp of North Carolina, Inc. (Exact name of registrant as specified in its charter) North Carolina 5 ...

EX-99.(A) 2 pebk_ex99a.htm PRESS RELEASE EARNINGS RELEASE EXHIBIT (99)(A) April 22, 2024 Contact: Lance A. Sellers President and Chief Executive Officer Jeffrey N. Hooper Executive Vice President and Chief Financial Officer 828-464-5620, Fax 828-465-6780 For Immediate Release PEOPLES BANCORP ANNOUNCES FIRST QUARTER 2024 RESULTS Peoples Bancorp of North Carolina, Inc. (NASDAQ: PEBK) (the "Company"), the parent company of Peoples Bank (the "Bank"), reported first quarter 2024 results with highlights as follow ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2023 000-27205 (Commission File No.) Peoples Bancorp of North Carolina, Inc. (Exact Name of Registrant as Specified in Its Charter) North Carolina 56-2132396 (State or Other Jurisdiction of Incorporation) (IRS Employer Identification No.) Securities Registered Pursuant to Section 12(g) of the Act: Indica ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ 000-27205 (Commission File No.) PEOPLES BANCORP OF NORTH CAROLINA, INC. (Exact name of registrant as specified in its charter) North Caroli ...

Credit Losses and Allowances - The adoption of ASC 326 resulted in an initial reduction to retained earnings of $838,000, net of tax, due to a $1.1 million increase in the allowance for credit losses[38]. - As of June 30, 2023, the allowance for credit losses on loans is estimated using relevant available information, with no loans individually evaluated[41]. - The Company has identified various portfolio segments for calculating the allowance for credit losses, using a Weighted Average Remaining Maturity (WARM) methodology[42]. - The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model[47]. - The allowance for credit losses on unfunded commitments is included in other liabilities on the Company's consolidated balance sheets[47]. - The allowance for credit losses decreased to $9.8 million as of June 30, 2023, from $10.5 million at December 31, 2022, showing a reduction of about 6.7%[56]. - The total impaired real estate loans as of December 31, 2022, amounted to $15,252,000, with a related allowance of $682,000[72]. - The bank's allowance for credit losses increased by $1,058,000 due to the implementation of the CECL methodology[76]. - The allowance for credit losses as of June 30, 2023, was $12,048,000, reflecting an increase from the previous balance due to adjustments and provisions for loan losses[76]. - The provision for loan losses for the six months ended June 30, 2023, was $617,000, indicating a proactive approach to managing credit risk[76]. - The average impaired loan balance for the twelve months ended December 31, 2022, was $16,190,000, with interest income recognized totaling $862,000[74]. - The bank closely monitors modified loans to assess the effectiveness of its modification efforts, ensuring financial stability for borrowers[69]. - The provision for credit losses for the three months ended June 30, 2023, was $375, compared to $410 for the same period in 2022, indicating a slight decrease of 8.5%[118]. Investment Securities - The total amortized cost of investment securities available for sale as of June 30, 2023, is $450,873,000, with a fair value of $394,084,000, reflecting unrealized losses of $56,856,000[48]. - The fair value of mortgage-backed securities as of June 30, 2023, is $264,779,000, with unrealized losses of $28,480,000[50]. - The fair value of investment securities available for sale was $394.1 million as of June 30, 2023, compared to an amortized cost of $450.9 million, resulting in an unrealized loss of $56.8 million[54]. - No securities available for sale were sold during the three months ended June 30, 2023, while proceeds from sales during the six months ended June 30, 2023, were $51.0 million, resulting in gross losses of $2.7 million[54]. - The company executed a securities sale transaction in January and February 2023, resulting in a $2.5 million net loss, aimed at reducing risk in the investment portfolio[4]. - The company has not recorded an allowance for credit losses on available-for-sale securities as of June 30, 2023, indicating a stable credit environment[52]. Loans and Deposits - The total net loans increased to $1,047.9 million as of June 30, 2023, compared to $1,022.1 million at December 31, 2022, reflecting a growth of about 2.5%[56]. - The total loans outstanding as of June 30, 2023, were $1,057.7 million, up from $1,032.6 million at December 31, 2022, representing an increase of approximately 2.4%[56]. - The total real estate loans amounted to $960.1 million as of June 30, 2023, compared to $929.0 million at December 31, 2022, reflecting an increase of approximately 3.3%[56]. - Total loans were $1.1 billion as of June 30, 2023, compared to $1.0 billion as of December 31, 2022[9]. - Total deposits as of June 30, 2023, were $1,369,524, down from $1,435,215 as of December 31, 2022, reflecting a decrease of approximately 4.6%[108]. - Total deposits remained stable at $1.4 billion as of June 30, 2023, with core deposits decreasing to $1.3 billion from $1.4 billion at December 31, 2022[178]. - Estimated uninsured deposits decreased to $361.8 million, or 26.42% of total deposits, from $439.8 million, or 30.64% at December 31, 2022[179]. Financial Performance - As of June 30, 2023, basic earnings per share were $0.88, with diluted earnings per share at $0.85, compared to $0.59 and $0.57 for the same period in 2022, representing an increase of 49.15% and 48.25% respectively[85]. - For the six months ended June 30, 2023, basic earnings per share were $1.46, while diluted earnings per share were $1.41, compared to $1.21 and $1.18 for the same period in 2022, indicating a growth of 20.67% and 19.49% respectively[86]. - The company reported a net income of $4,808 for the three months ended June 30, 2023, compared to $3,217 for the same period in 2022, marking an increase of 49.5%[119]. - Year-to-date net earnings for the first half of 2023 were $8.0 million, or $1.46 per share, compared to $6.7 million, or $1.21 per share, in the same period last year[133]. - Net interest income for Q2 2023 was $13.8 million, up from $11.3 million in Q2 2022, driven by a $5.6 million increase in interest income[137]. - Interest income for the six months ended June 30, 2023, was $34.4 million, compared to $23.3 million for the same period in 2022, reflecting an increase of $11.1 million[145]. - The annualized return on average assets for the first half of 2023 was 1.01%, compared to 0.81% for the same period last year[134]. - The annualized return on average equity for the six months ended June 30, 2023, was 14.12%, compared to 10.39% for the same period in 2022[198]. Capital and Liquidity - The Company's Tier 1 capital ratio was 13.80% at June 30, 2023, up from 13.21% at December 31, 2022[201]. - The total risk-based capital ratio was 14.77% at June 30, 2023, compared to 14.04% at December 31, 2022[201]. - The common equity Tier 1 capital ratio increased to 12.59% at June 30, 2023, from 12.03% at December 31, 2022[201]. - The Company's Tier 1 leverage capital ratio was 10.41% at June 30, 2023, an increase from 9.82% at December 31, 2022[201]. - The liquidity ratio was 26.98% at June 30, 2023, down from 30.32% at December 31, 2022, with a minimum required ratio of 10%[196]. - The Bank was considered "well capitalized" at June 30, 2023, based on regulatory capital guidelines[203]. Interest Rates and Expenses - Interest expense for Q2 2023 was $3.8 million, compared to $644,000 in Q2 2022, primarily due to increased rates on interest-bearing liabilities[139]. - The average rate paid on certificates of deposit rose to 3.19% in Q2 2023 from 0.56% in the same period last year[139]. - Interest expense for the six months ended June 30, 2023, was $6.3 million, up from $1.3 million for the same period in 2022, indicating a significant increase due to higher rates on interest-bearing liabilities[146]. - The average rate paid on interest-bearing liabilities increased to 1.31% for the six months ended June 30, 2023, from 0.27% for the same period in 2022[146]. Miscellaneous - The company has not experienced any material impact on its results of operations or financial position from the recent accounting standards updates adopted[34]. - The company has no material subsequent events as of the date the financial statements were issued[120]. - The company aims to achieve growth through local market expansion and potential acquisitions, although acquisitions are not deemed necessary for continued shareholder returns[126]. - The company maintains high levels of balance sheet liquidity and actively monitors asset quality to mitigate risks from unfavorable economic trends[126].

Accounting Standards and Credit Losses - The Company adopted ASC 326 on January 1, 2023, resulting in an initial reduction to retained earnings of $838,000 due to a $1.1 million increase in the allowance for credit losses[34]. - The allowance for credit losses on loans is estimated using relevant information, with no loans individually evaluated as of March 31, 2023[38]. - The allowance for credit losses on off-balance sheet credit exposures is estimated using the same methodologies as portfolio loans[43]. - The allowance for credit losses on unfunded commitments increased by $2.3 million as part of the ASC 326 adoption[34]. - The allowance for credit losses decreased to $9.617 million as of March 31, 2023, from $10.494 million at December 31, 2022, indicating a reduction of about 8.3%[52]. - The total allowance for credit losses on loans was $9,617,000 as of March 31, 2023, with $2,075,000 allocated for loan commitments[72]. - The allowance for credit losses reflects management's assessment of credit risks, with qualitative adjustments for economic conditions[147]. - Provision for credit losses was $224,000 for the three months ended March 31, 2023, compared to $71,000 for the same period in 2022, indicating increased credit risk assessment[134]. - Provision for credit losses increased to $224,000 in Q1 2023 from $71,000 in Q1 2022, attributed to higher loan balances and economic adjustments[140]. Investment Securities - The Company’s total investment securities available for sale as of March 31, 2023, amounted to $399,148,000, with unrealized losses of $50,719,000[45]. - The fair value of U.S. Treasuries decreased to $10,008,000 as of March 31, 2023, with unrealized losses of $949,000[45]. - The Company’s mortgage-backed securities had a fair value of $273,820,000 with unrealized losses of $23,040,000 as of March 31, 2023[45]. - The Company did not have any other than-temporarily impaired investment securities as of December 31, 2022[35]. - As of March 31, 2023, unrealized losses in the investment securities portfolio related to debt securities totaled $50.7 million, down from $62.3 million at December 31, 2022, indicating a reduction of approximately 18.5%[48]. - The total amortized cost of investment securities available for sale was $449.031 million, with a fair value of $399.148 million, reflecting a decrease in fair value of about 11.1%[50]. - During the three months ended March 31, 2023, proceeds from sales of securities available for sale were $53.5 million, resulting in gross losses of $2.7 million and gross gains of $177,000[50]. - The fair value of investment securities available for sale was $399,148,000 as of March 31, 2023, down from $445,394,000 as of December 31, 2022[106][107]. Loans and Lending Operations - Total loans increased to $1.050871 billion as of March 31, 2023, compared to $1.032608 billion at December 31, 2022, representing a growth of approximately 1.8%[52]. - The total net loans amounted to $1.041254 billion as of March 31, 2023, compared to $1.022114 billion at December 31, 2022, reflecting an increase of about 1.9%[52]. - The company has a diversified loan portfolio, with real estate loans making up a significant portion, totaling $947.425 million as of March 31, 2023[52]. - The company reported that no securities available for sale were sold during the three months ended March 31, 2022, highlighting a change in strategy in the current period[50]. - The average balance of impaired loans collectively evaluated for impairment was $5.3 million at March 31, 2022, and $4.9 million at December 31, 2022[70]. - The total impaired real estate loans included $10,441,000 in non-traditional single-family residential loans, with an allowance of $611,000[67]. - The total loans not secured by real estate reached $103,446,000, indicating a diverse loan portfolio[80]. - The company’s commercial loans totaled $410,775,000, demonstrating strong performance in this segment[80]. - The company has a total of $1,050,871,000 in loans, reflecting a robust lending operation[80]. Financial Performance - The company reported net earnings of $3,172,000 for the three months ended March 31, 2023, resulting in a basic earnings per share of $0.58 and diluted earnings per share of $0.56[84]. - Net income for the three months ended March 31, 2023, was $3.2 million, or $0.58 per share, compared to $3.5 million, or $0.63 per share, for the same period in 2022, reflecting a decrease in non-interest income and an increase in non-interest expense[131]. - Net interest income increased to $14.3 million for the three months ended March 31, 2023, from $10.7 million for the same period in 2022, driven by a $5.5 million increase in interest income[134]. - Interest income rose to $16.8 million for the three months ended March 31, 2023, compared to $11.3 million for the same period in 2022, primarily due to a $3.1 million increase in interest income and fees on loans[135]. - The annualized return on average assets was 0.81% for the three months ended March 31, 2023, down from 0.85% for the same period in 2022[132]. - The annualized return on average shareholders' equity increased to 11.78% for the three months ended March 31, 2023, compared to 10.10% for the same period in 2022[132]. - Total assets as of March 31, 2023, were $1.602 billion, compared to $1.663 billion as of March 31, 2022[134]. - Non-interest expense increased to $12.1 million for the three months ended March 31, 2023, from $10.6 million for the same period in 2022[134]. Deposits and Funding - The company reported total deposits of $1,413,441,000 as of March 31, 2023, with a fair value of $1,415,287,000[107]. - Total deposits were $1.4 billion at March 31, 2023, consistent with December 31, 2022[162]. - Core deposits totaled $1.3 billion at March 31, 2023, down from $1.4 billion at December 31, 2022, representing 96.33% of total deposits[175]. - Estimated uninsured deposits were $407.8 million, or 28.85% of total deposits, at March 31, 2023, compared to $439.8 million, or 30.64% at December 31, 2022[163]. - The Bank's ratio of wholesale funding to total assets was 1.29% as of March 31, 2023, compared to 0.92% at December 31, 2022[176]. Capital and Liquidity - Shareholders' equity increased to $114.8 million, or 7.16% of total assets, at March 31, 2023, compared to $105.2 million, or 6.49% of total assets, at December 31, 2022[182]. - The liquidity ratio decreased to 28.23% at March 31, 2023, from 30.32% at December 31, 2022, while the minimum required liquidity ratio remained at 10%[180]. - The Company's Tier 1 capital ratio was 13.34% at March 31, 2023, compared to 13.21% at December 31, 2022[186]. - The total risk-based capital ratio was 14.27% at March 31, 2023, up from 14.04% at December 31, 2022[186]. - The Bank's Tier 1 risk-based capital ratio was 13.24% at March 31, 2023, compared to 13.10% at December 31, 2022[187]. - The Company has authorized a stock repurchase program of up to $2.0 million, with no shares repurchased as of March 31, 2023[184]. - The Bank had no borrowings from the Federal Reserve Bank (FRB) as of March 31, 2023, and the availability under the line of credit with the FRB was $449.2 million[178]. Other Financial Metrics - The average yield on loans for the three months ended March 31, 2023, was 5.04%, compared to 4.46% for the same period in 2022[135]. - The average number of shares outstanding for diluted earnings per share calculation was 5,656,250 for the first quarter of 2023[84]. - The total carrying amount of loans, net, was $1,041,254,000 as of March 31, 2023, with a fair value of $1,021,007,000[106]. - The fair value of mortgage loans held for sale increased to $417,000 as of March 31, 2023, compared to $211,000 as of December 31, 2022[104][106]. - The total operating lease liability as of March 31, 2023, was $5,033,000 after accounting for imputed interest[111]. - The fair value of mutual funds held in deferred compensation trust was $1,787,000 as of March 31, 2023, compared to $1,327,000 as of December 31, 2022[106][107]. - The total proposed adjustments sought by the North Carolina Department of Revenue (NCDOR) was approximately $1.4 million, which the Bank is contesting[190].

[Part I](index=3&type=section&id=PART%20I) [Business](index=3&type=section&id=Item%201.%20Business) Peoples Bancorp of North Carolina, Inc is a bank holding company for Peoples Bank, a state-chartered commercial bank with **$1.6 billion in assets**, a **$1.0 billion loan portfolio**, and **$1.4 billion in deposits** as of December 31, 2022 Financial Metric | Financial Metric | Value (as of Dec 31, 2022) | | :--- | :--- | | Total Assets | $1.6 billion | | Net Loans | $1.0 billion | | Deposits | $1.4 billion | | Total Securities | $448.1 million | | Shareholders' Equity | $105.2 million | - The Company operates as the holding company for Peoples Bank, with its primary income derived from dividends paid by the Bank[13](index=13&type=chunk) - The Bank serves its market through 17 banking offices and several loan production offices across various communities in North Carolina, including Charlotte, Raleigh, and Cary[14](index=14&type=chunk) - As of December 31, 2022, the Company had **291 full-time equivalent employees**[17](index=17&type=chunk)[41](index=41&type=chunk) [General Business and Subsidiaries](index=3&type=section&id=General%20Business%20and%20Subsidiaries) The Company's primary operation is owning Peoples Bank, which has four main subsidiaries for investment and real estate services, and a trust that issued **$20.6 million** in securities - The Bank's subsidiaries provide a range of financial services including investment counseling, real estate appraisal, brokerage, and management of foreclosed assets[19](index=19&type=chunk) - The Company formed PEBK Capital Trust II, a Delaware statutory trust, to issue **$20.6 million** of trust preferred securities, of which **$5.0 million** was redeemed in 2019[20](index=20&type=chunk) - The Bank's loan portfolio includes Individual Taxpayer Identification Number (ITIN) mortgage loans originated through its former Banco de la Gente offices, which are now integrated under the Peoples Bank name[15](index=15&type=chunk)[16](index=16&type=chunk) [Market Area and Competition](index=4&type=section&id=Market%20Area%20and%20Competition) The Bank's primary market is the competitive Catawba Valley region of North Carolina, where it holds a significant deposit market share in its core counties Deposit Market Share (as of June 30, 2022) | County | Deposit Market Share (as of June 30, 2022) | Rank | | :--- | :--- | :--- | | Catawba County | 20.73% | 2nd of 11 banks | | Lincoln County | 18.98% | 2nd of 9 banks | | Alexander County | 17.57% | 4th of 5 banks | - The Bank's primary market area is diversified across manufacturing, retail, technology, services, and utilities, with major employers including Catawba County Schools, CommScope, and Duke LifePoint/Frye Regional Medical Center[22](index=22&type=chunk) [Lending and Investment Policies](index=4&type=section&id=Lending%20and%20Investment%20Policies) The Bank's lending and investment activities are governed by Board-approved policies focused on sound portfolio management, liquidity, and safety of principal - The Bank's legal lending limit was **$26.5 million** as of December 31, 2022, with the largest credit relationship at **$19.7 million**[28](index=28&type=chunk) - The Bank Board receives monthly, quarterly, semi-annual, and annual reports to monitor the loan portfolio's quality, performance, and risk concentrations[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - Investment objectives include maximizing earnings, providing liquidity, mitigating interest rate risk, ensuring principal safety, managing tax liabilities, and meeting pledging requirements[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Human Capital Management](index=6&type=section&id=Human%20Capital%20Management) The Company employed **291 full-time equivalent employees** at year-end 2022 and fosters a culture built on integrity, customer service, and diversity, equity, and inclusion - The company's culture is guided by core values including being informed, fair, accountable, progressive, and focused on exceptional customer service[43](index=43&type=chunk)[50](index=50&type=chunk) - The company promotes a culture of diversity and inclusion, embracing employee differences and providing training on valuing differences, supported by a "Courageous Conversations" initiative[43](index=43&type=chunk)[46](index=46&type=chunk) [Supervision and Regulation](index=7&type=section&id=Supervision%20and%20Regulation) The Company and Bank are subject to extensive regulation, adhere to Basel III standards, exceeded all minimum capital requirements as of year-end 2022, and adopted the CECL standard in 2023 Capital Ratios (as of Dec 31, 2022) | Capital Ratios (as of Dec 31, 2022) | The Bank | The Company | | :--- | :--- | :--- | | Tier 1 Leverage Capital Ratio | 9.68% | 9.82% | | Common Equity Tier 1 Risk-Based Capital | 13.10% | 12.03% | | Tier 1 Risk-Based Capital Ratio | 13.10% | 13.21% | | Total Risk-Based Capital Ratio | 13.93% | 14.04% | - The Company adopted the Current Expected Credit Loss (CECL) accounting standard on January 1, 2023, which requires recognizing lifetime expected credit losses on financial assets[79](index=79&type=chunk) - The Bank received a **"satisfactory" rating** in its last Community Reinvestment Act (CRA) examination conducted in January 2020[69](index=69&type=chunk) - FDIC insurance expense was approximately **$461,000 in 2022**, compared to **$415,000 in 2021** and **$263,000 in 2020**[66](index=66&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The Company faces material risks from economic conditions, credit concentrations, interest rate fluctuations, cybersecurity, and common stock volatility [Risks Related to Our Business](index=15&type=section&id=RISK%20FACTORS%20RELATED%20TO%20OUR%20BUSINESS) Business risks include economic downturns, credit concentration in the Catawba Valley, interest rate changes, cybersecurity threats, and the impact of adopting the CECL standard - The adoption of the **CECL accounting standard** on January 1, 2023, requires estimating lifetime credit losses and may increase the allowance for loan losses and its volatility[104](index=104&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - The Bank's five largest deposit relationships accounted for **$117.0 million**, or **7.89% of total deposits** and repurchase agreements, as of December 31, 2022, posing a concentration risk[111](index=111&type=chunk) - The available-for-sale investment securities portfolio had **unrealized losses of $62.3 million** at year-end 2022, and sales in early 2023 resulted in a **net loss of approximately $2.5 million**[133](index=133&type=chunk) - The company faces risks from extensive regulation, including potential noncompliance with the Bank Secrecy Act (BSA) and fair lending laws, which could result in fines and reputational damage[123](index=123&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) [Risks Related to the Company's Stock](index=24&type=section&id=RISKS%20RELATED%20TO%20THE%20COMPANY'S%20STOCK) The Company's common stock (PEBK) is subject to price volatility from low trading volume, is not FDIC insured, and dividend payments are not guaranteed - The trading volume for the company's common stock (PEBK) is **relatively low**, which could lead to price volatility and difficulty in reselling shares[157](index=157&type=chunk) - The ability to pay dividends on common stock is **not guaranteed** and depends on the Bank's financial condition and regulatory guidelines from the Federal Reserve[159](index=159&type=chunk) - The company's common stock is not a deposit and is **not insured by the FDIC** or any other government agency, subjecting it to investment risk, including the possible loss of principal[158](index=158&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The Company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[162](index=162&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The Company owns its corporate office and 13 other properties while leasing 9 locations, including branches and loan production offices - The company **owns its corporate office** in Newton, NC, and 13 other properties[163](index=163&type=chunk)[164](index=164&type=chunk) - The company **leases 9 properties**, which include branch offices and loan production offices in key growth markets such as Charlotte, Raleigh, Cary, and Winston-Salem[163](index=163&type=chunk)[165](index=165&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The Company is in a dispute with the NCDOR over a **$1.4 million** tax credit adjustment, though potential exposure is believed to be limited to approximately **$125,000** - The NCDOR is seeking to disallow tax credits from 2014-2016, with a proposed adjustment of approximately **$1.4 million** (including tax, penalties, and interest)[166](index=166&type=chunk) - The Bank paid **$1.2 million** to the NCDOR to halt interest accrual while contesting the disallowance[166](index=166&type=chunk) - Management believes a purchased Guaranty Agreement limits the Bank's potential exposure in the NCDOR matter to approximately **$125,000**[166](index=166&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The Company has no mine safety disclosures to report - There are no mine safety disclosures[168](index=168&type=chunk) [Part II](index=28&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Company's stock (PEBK) trades on NASDAQ, with dividend payments subject to regulatory limits, and **4,200 shares** were repurchased in Q4 2022 - The Company's common stock is listed on the NASDAQ Global Market under the symbol **"PEBK"**[170](index=170&type=chunk) Issuer Purchases of Equity Securities | Period (2022) | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Oct 1 - 31 | 3,200 | $27.50 | 3,200 | | Nov 1 - 30 | 2,446 | $28.43 | 1,000 | | Dec 1 - 31 | 269 | $30.71 | 0 | | **Q4 Total** | **5,915** | **$28.03** | **4,200** | - The stock repurchase program authorized in February 2022 expired in February 2023; as of December 31, 2022, approximately **$1.29 million remained available** for repurchase under the plan[176](index=176&type=chunk)[178](index=178&type=chunk) [Selected Financial Data](index=30&type=section&id=Item%206.%20Selected%20Financial%20Data) Information for this item is incorporated by reference from the "Selected Financial Data" section of the Company's 2022 Annual Report - Selected Financial Data is incorporated by reference from page A-3 of the Annual Report (Exhibit 13)[179](index=179&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Information for this item is incorporated by reference from the "Management's Discussion and Analysis" section of the Company's 2022 Annual Report - Management's Discussion and Analysis is incorporated by reference from pages A-4 through A-18 of the Annual Report (Exhibit 13)[180](index=180&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company has no information to report for this item - This item is not applicable[181](index=181&type=chunk) [Financial Statements and Supplementary Data](index=30&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements and supplementary data are incorporated by reference from the Company's 2022 Annual Report - The consolidated financial statements and supplementary data are incorporated by reference from pages A-19 through A-59 of the Annual Report (Exhibit 13)[181](index=181&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=31&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The Company reports no changes in or disagreements with its accountants on accounting and financial disclosure - This item is not applicable[182](index=182&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that the Company's disclosure controls and procedures were **effective** as of the end of the period covered by this report[182](index=182&type=chunk) - Management assessed internal control over financial reporting based on the COSO framework and believes it was **effective** as of December 31, 2022[187](index=187&type=chunk) - As a smaller reporting company, this annual report **does not include an attestation report** from its independent registered public accounting firm regarding internal control over financial reporting[188](index=188&type=chunk) [Other Information](index=31&type=section&id=Item%209B.%20Other%20Information) The Company has no other information to report - This item is not applicable[189](index=189&type=chunk) [Part III](index=32&type=section&id=PART%20III) [Directors and Executive Officers and Corporate Governance](index=32&type=section&id=Item%2010.%20Directors%20and%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the Company's 2023 Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement[191](index=191&type=chunk) [Executive Compensation](index=32&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the Company's 2023 Proxy Statement - Information regarding executive compensation is incorporated by reference from the Proxy Statement[192](index=192&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=32&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, with **279,920 securities available for future issuance** under approved equity compensation plans Equity Compensation Plan Information | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 28,440 | $0.00 | 279,920 | | Equity compensation plans not approved by security holders | - | - | - | | **Total** | **28,440** | **$0.00** | **279,920** | - The securities to be issued consist of restricted stock units granted under the 2009 and 2020 Omnibus Stock Ownership and Long Term Incentive Plans, which do not have an exercise price[195](index=195&type=chunk)[196](index=196&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=33&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the Company's 2023 Proxy Statement - Information regarding related transactions and director independence is incorporated by reference from the Proxy Statement[197](index=197&type=chunk) [Principal Accountant Fees and Services](index=33&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the Company's 2023 Proxy Statement - Information regarding principal accountant fees and services is incorporated by reference from the Proxy Statement[198](index=198&type=chunk) [Part IV](index=34&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=34&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including the 2022 Annual Report, material contracts, and required SOX certifications - The Company's 2022 Annual Report is attached as **Exhibit (13)** and contains the consolidated financial statements[202](index=202&type=chunk)[207](index=207&type=chunk) - Exhibits include key corporate governance documents, material contracts such as employment agreements and trust agreements for securities, and required **SOX certifications**[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - Financial data formatted in eXtensible Business Reporting Language (XBRL) is included as **Exhibit (101)**[207](index=207&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ 000-27205 (Commission File No.) PEOPLES BANCORP OF NORTH CAROLINA, INC. (Exact name of registrant as specified in its charter) North Carolina 56-2132396 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: Septe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) North Carolina 56-2132396 For the quarterly period ended: June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ 000-27205 (Commission File No.) PEOPLES BANCORP OF NORTH CAROLI ...