Shares of Peoples Bancorp of North Carolina, Inc. PEBK have lost 6.2% since the company reported its earnings for the quarter ended March 31, 2026, underperforming the S&P 500 Index, which gained 0.1% over the same period. Over the past month, however, the stock gained 2.7%, lagging the broader market’s 9.3% rise.
Peoples Bancorp’s Earnings Snapshot
Peoples Bancorp reported net earnings of $4.4 million for the first quarter of 2026, a 1.2% increase from $4.3 million in the year-ago period. Earnings per share rose by a penny to $0.80 from $0.79 a year earlier.
While total revenue is not explicitly reported, net interest income — a key revenue component — increased 8.3% to $15.1 million from $13.9 million. Total interest income climbed 4.5% to $20.9 million from $19.9 million.
Non-interest income remained flat at $6.5 million year over year. Growth in net interest income was partly offset by higher provisions for credit losses and increased operating expenses.
PEBK’s Net Interest Income and Margin Expansion
PEBK’s primary earnings driver, net interest income, benefited from both higher interest income and reduced interest expense. Interest income growth was largely fueled by increased loan balances, with total loans rising to $1.24 billion as of March 31, 2026, from $1.20 billion at the end of 2025.
Net interest margin (NIM) improved to 3.68% from 3.51% in the prior-year quarter, reflecting more favorable funding costs and asset yields. This margin expansion underscores Peoples Bancorp’s ability to manage interest rate dynamics effectively.
Peoples Bancorp of North Carolina, Inc. Price, Consensus and EPS Surprise
Peoples Bancorp of North Carolina, Inc. price-consensus-eps-surprise-chart | Peoples Bancorp of North Carolina, Inc. Quote
Peoples Bancorp’s Expense Pressures and Credit Costs
Despite stronger net interest income, profitability was tempered by higher costs. Non-interest expense increased 5.4% to $15.4 million from $14.6 million a year earlier, driven by higher salaries and employee benefits, occupancy costs and other operating expenses. At the same time, the provision for credit losses surged to $560,000 from $268,000, reflecting loan growth and a more cautious stance on credit quality.
PEBK’s Balance Sheet Growth and Asset Quality
Peoples Bancorp continued to expand its balance sheet, with total assets reaching $1.73 billion as of March 31, 2026, from $1.70 billion at the end of 2025. Deposits rose to $1.54 billion as of March 31, 2026, from $1.51 billion at the end of 2025, supported by growth in core deposits, which increased to $1.40 billion and represented 90.70% of total deposits. Loan growth remained a central theme, contributing to both higher interest income and increased credit provisioning.
Asset quality metrics showed some mixed trends. Non-performing assets increased to $4.8 million, or 0.28% of total assets, as of March 31, 2026, from $4.2 million, or 0.25%, at the end of the previous quarter. However, the allowance for credit losses remained stable at 0.84% of total loans, suggesting management believes reserves are adequate despite rising non-performing assets.
Peoples Bancorp’s Management Commentary and Key Drivers
Management attributed the improvement in earnings primarily to higher net interest income, driven by loan growth and lower funding costs. However, this benefit was partially offset by elevated credit loss provisions and higher operating expenses. Declines in certain fee-based income streams, such as appraisal management fees, also weighed on non-interest income, though these were offset by gains in mortgage banking and miscellaneous income categories.
PEBK’s Profitability Metrics
Profitability ratios reflected slight pressure despite earnings growth. Return on average assets declined year over year to 1.04% from 1.07%, while return on average equity fell to 11.45% from 13.52% in the prior-year period. These declines indicate that while earnings improved modestly, they did not keep pace with growth in Peoples Bancorp’s asset and equity base.
Peoples Bancorp’s Other Developments
PEBK did not report any significant acquisitions, divestitures or restructuring activities during the quarter. Operations remained focused on organic growth, particularly in lending and deposit gathering within its North Carolina markets.
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