Zacks Initiates Coverage of Peoples Bancorp With Neutral Recommendation

Core Viewpoint - Zacks Investment Research has initiated coverage of Peoples Bancorp of North Carolina, Inc. (PEBK) with a "Neutral" recommendation, reflecting a mixed outlook for the company despite its progress in community banking services [1] Company Overview - Peoples Bancorp operates as a bank holding company for Peoples Bank, a state-chartered commercial bank established in 1912, providing community banking services primarily in the Catawba Valley and surrounding areas through 15 full-service banking offices and several loan production offices in North Carolina [2] Financial Performance - Peoples Bancorp has shown consistent earnings momentum in the first half of 2025, with second-quarter net income increasing by 5.6% year over year to $5.2 million, or 95 cents per share, driven by higher net interest and fee income [3] - Profitability metrics are strong, with a return on average assets of 1.23% and a return on equity of 15.08%, while net interest margin improved to 3.57% from 3.35% a year earlier, indicating effective asset-liability management [3] - Non-performing assets were only 0.28% of total assets as of June 30, 2025, reflecting strong asset quality and prudent credit provisioning [4] - Shareholders' equity rose to $144 million, representing 8.5% of total assets, showcasing healthy internal capital generation [4] Market Positioning - Peoples Bancorp's stock has outperformed its industry peers and the broader market over the past year, indicating that investors recognize its solid fundamentals and stable performance, although significant near-term growth or multiple expansion is not anticipated [6] - The company has a modest market capitalization of $149.7 million, which positions it within a promising but risky segment of the market [7]