EXHIBIT 99(a)

NEWS RELEASE

April 25, 2022

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 2022 RESULTS

Peoples Bancorp of North Carolina, Inc. (NASDAQ: PEBK) (the “Company”), the parent company of Peoples Bank (the “Bank”), reported first quarter 2022 results with highlights as follows:

First quarter 2022 highlights:

· Net earnings were $3.5 million or $0.63 per share and $0.61 per diluted share for the three months ended March 31, 2022, as compared to $4.1 million or $0.73 per share and $0.71 per diluted share for the same period one year ago.

· The Bank recognized $600,000 in Small Business Administration (SBA) Paycheck Protection Program (PPP) loan fee income during the three months ended March 31, 2022, as compared to $999,000 in PPP loan fee income for the same period one year ago.

· Cash dividends were $0.33 per share during the three months ended March 31, 2022, as compared to $0.16 per share for the prior year period.

· Total loans were $889.8 million at March 31, 2022, as compared to $884.9 million at December 31, 2021, despite a $11.4 million reduction in PPP loans during the first quarter of 2022.

· Core deposits were $1.4 billion or 98.26% of total deposits at March 31, 2022, compared to $1.3 billion or 97.89% of total deposits at March 31, 2021.

Net earnings were $3.5 million or $0.63 per share and $0.61 per diluted share for the three months ended March 31, 2022, as compared to $4.1 million or $0.73 per share and $0.71 per diluted share for the prior year period. Lance A. Sellers, President and Chief Executive Officer, attributed the decrease in first quarter net earnings to a decrease in net interest income, an increase in the provision for loan losses and an increase in non-interest expense, which were partially offset by an increase in non-interest income compared to the prior year period, as discussed below.

Net interest income was $10.7 million for the three months ended March 31, 2022, compared to $11.1 million for the three months ended March 31, 2021. The decrease in net interest income is due to a $593,000 decrease in interest income, which was partially offset by a $152,000 decrease in interest expense. The decrease in interest income is primarily due to a $922,000 decrease in interest income and fees on loans, which was partially offset by an increase in interest income on investment securities. The decrease in interest income and fees on loans is primarily due to a decrease in total loans and a decrease in fee income on SBA PPP loans. The increase in interest income on investment securities is primarily due to additional securities purchased resulting from an increase in cash resulting from increased deposits. The decrease in interest expense is primarily due to a decrease in rates paid on interest-bearing liabilities. Net interest income after the provision for loan losses was $10.6 million for the three months ended March 31, 2022, compared to $11.6 million for the three months ended March 31, 2021. The provision for loan losses for the three months ended March 31, 2022 was $71,000, compared to a recovery of $455,000 for the three months ended March 31, 2021. The increase in the provision for loan losses is primarily attributable to an increase in reserves on loans in a pool that had once been given payment modifications as a result of the COVID-19 pandemic, and an increase in reserves due to a net increase in the volume of loans in the general reserve pool.

Non-interest income was $7.0 million for the three months ended March 31, 2022, compared to $5.9 million for the three months ended March 31, 2021. The increase in non-interest income is primarily attributable to a $1.7 million increase in appraisal management fee income due to an increase in the volume of appraisals, which was partially offset by a $670,000 decrease in mortgage banking income due to a decrease in mortgage loan volume and additional mortgage loans being retained for the Bank’s portfolio.

Non-interest expense was $13.3 million for the three months ended March 31, 2022, compared to $12.3 million for the three months ended March 31, 2021. The increase in non-interest expense is primarily attributable to a $1.3 million increase in appraisal management fee expense due to an increase in the volume of appraisals, which was partially offset by a $334,000 decrease in salaries and employee benefits expense primarily due to a decrease in insurance costs.

Income tax expense was $848,000 for the three months ended March 31, 2022, compared to $1.0 million for the three months ended March 31, 2021. The effective tax rate was 19.72% for the three months ended March 31, 2022, compared to 20.24% for the three months ended March 31, 2021.

Total assets were $1.7 billion as of March 31, 2022, compared to $1.6 billion at December 31, 2021. Available for sale securities were $408.0 million as of March 31, 2022, compared to $406.5 million as of December 31, 2021. Total loans were $889.8 million as of March 31, 2022, compared to $884.9 million as of December 31, 2021. This increase in loans was achieved despite a $11.4 million reduction in PPP loans during the first quarter of 2022. The Bank had $6.6 million and $18.0 million in PPP loans at March 31, 2022 and December 31, 2021, respectively.

Non-performing assets were $3.3 million or 0.20% of total assets at March 31, 2022, compared to $3.2 million or 0.20% of total assets at December 31, 2021. Non-performing assets include $3.3 million in commercial and residential mortgage loans and $8,000 in other loans at March 31, 2022, compared to $3.2 million in commercial and residential mortgage loans and $51,000 in other loans at December 31, 2021.

The allowance for loan losses was $9.4 million or 1.06% of total loans at March 31, 2022 and December 31, 2021. Management believes the current level of the allowance for loan losses is adequate; however, there is no assurance that additional adjustments to the allowance will not be required because of changes in economic conditions, regulatory requirements or other factors.

Deposits were $1.5 billion at March 31, 2022, compared to $1.4 billion at December 31, 2021. Core deposits, which include noninterest-bearing demand deposits, NOW, MMDA, savings and non-brokered certificates of deposit of denominations less than $250,000, were $1.4 billion at March 31, 2022 and December 31, 2021. Certificates of deposit in amounts of $250,000 or more totaled $25.5 million at March 31, 2022, compared to $26.3 million at December 31, 2021.

Securities sold under agreements to repurchase were $34.8 million at March 31, 2022, compared to $37.1 million at December 31, 2021. Junior subordinated debentures were $15.5 million at March 31, 2022 and December 31, 2021. Shareholders’ equity was $125.4 million, or 7.54% of total assets, at March 31, 2022, compared to $142.4 million, or 8.77% of total assets, at December 31, 2021. The decrease in shareholders’ equity is primarily due to an increase in the unrealized loss on investment securities available for sale due to changes in bond yields. The Company repurchased 7,000 shares of its common stock during the three months ended March 31, 2022 under the Company’s stock repurchase program, which was authorized in January 2022.

Peoples Bank currently operates 17 banking offices entirely in North Carolina, with offices in Catawba, Alexander, Lincoln, Mecklenburg, Iredell and Wake Counties. The Bank also operates loan production offices in Lincoln, Mecklenburg, Rowan and Forsyth Counties. The Company’s common stock is publicly traded and is quoted on the Nasdaq Global Market under the symbol “PEBK.”

Statements made in this press release, other than those concerning historical information, should be considered forward-looking statements pursuant to the safe harbor provisions of the Securities Exchange Act of 1934 and the Private Securities Litigation Act of 1995. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management and on the information available to management at the time that this release was prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate,” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, (1) competition in the markets served by Peoples Bank, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and the possible impairment of collectibility of loans, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environment and tax laws, (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations and (7) other risks and factors identified in the Company’s other filings with the Securities and Exchange Commission, including but not limited to those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

CONSOLIDATED BALANCE SHEETS
March 31, 2022, December 31, 2021 and March 31, 2021
(Dollars in thousands)
	March 31, 2022			December 31, 2021			March 31, 2021
	(Unaudited)			(Audited)			(Unaudited)
ASSETS:
Cash and due from banks	$	47,462		$	44,711		$	43,726
Interest-bearing deposits		257,644			232,788			165,311
Cash and cash equivalents		305,106			277,499			209,037
Investment securities available for sale		408,037			406,549			325,517
Other investments		3,569			3,668			3,791
Total securities		411,606			410,217			329,308
Mortgage loans held for sale		885			3,637			4,236
Loans		889,758			884,869			946,497
Less: Allowance for loan losses		(9,426	)		(9,355	)		(9,532	)
Net loans		880,332			875,514			936,965
Premises and equipment, net		15,658			16,104			18,184
Cash surrender value of life insurance		17,401			17,365			17,065
Accrued interest receivable and other assets		31,671			23,857			22,783
Total assets	$	1,662,659		$	1,624,193		$	1,537,578
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Noninterest-bearing demand	$	553,185		$	514,319		$	524,176
Interest-bearing demand, MMDA & savings		816,779			797,179			701,798
Time, $250,000 or more		25,516			26,333			28,109
Other time		73,255			74,917			80,382
Total deposits		1,468,735			1,412,748			1,334,465
Securities sold under agreements to repurchase		34,823			37,094			31,916
Junior subordinated debentures		15,464			15,464			15,464
Accrued interest payable and other liabilities		18,193			16,518			15,704
Total liabilities		1,537,215			1,481,824			1,397,549
Shareholders' equity:
Preferred stock, no par value; authorized 5,000,000 shares; no shares issued and outstanding		-			-			-
Common stock, no par value; authorized 20,000,000 shares; issued and outstanding 5,656,030 shares at 3/31/22, 5,661,569 shares at 12/31/21, 5,789,166 shares at 3/31/21		53,147			53,305			56,910
Common stock held by deferred compensation trust, at cost; 163,883 shares at 3/31/22, 162,193 shares at 12/31/21, 156,808 shares at 12/31/20		(2,042	)		(1,992	)		(1,849	)
Deferred compensation		2,042			1,992			1,849
Retained earnings		90,543			88,968			80,819
Accumulated other comprehensive income (loss)		(18,246	)		96			2,300
Total shareholders' equity		125,444			142,369			140,029
Total liabilities and shareholders' equity	$	1,662,659		$	1,624,193		$	1,537,578

CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31, 2022 and 2021
(Dollars in thousands, except per share amounts)
	Three months ended
	March 31,
	2022		2021
	(Unaudited)		(Unaudited)
INTEREST INCOME:
Interest and fees on loans	$	9,742	$	10,664
Interest on due from banks		111		35
Interest on investment securities:
U.S. Government sponsored enterprises		511		538
State and political subdivisions		943		639
Other		22		46
Total interest income		11,329		11,922
INTEREST EXPENSE:
Interest-bearing demand, MMDA & savings deposits		403		497
Time deposits		146		212
Junior subordinated debentures		75		71
Other		39		35
Total interest expense		663		815
NET INTEREST INCOME		10,666		11,107
PROVISION FOR (RECOVERY OF) LOAN LOSSES		71		(455	)
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		10,595		11,562
NON-INTEREST INCOME:
Service charges		1,168		926
Other service charges and fees		193		212
Mortgage banking income		200		870
Insurance and brokerage commissions		240		260
Appraisal management fee income		3,506		1,816
Miscellaneous		1,739		1,789
Total non-interest income		7,046		5,873
NON-INTEREST EXPENSES:
Salaries and employee benefits		5,849		6,183
Occupancy		1,916		1,953
Appraisal management fee expense		2,772		1,456
Other		2,804		2,676
Total non-interest expense		13,341		12,268
EARNINGS BEFORE INCOME TAXES		4,300		5,167
INCOME TAXES		848		1,046
NET EARNINGS	$	3,452	$	4,121
PER SHARE AMOUNTS
Basic net earnings	$	0.63	$	0.73
Diluted net earnings	$	0.61	$	0.71
Cash dividends	$	0.33	$	0.16
Book value	$	22.84	$	24.86

FINANCIAL HIGHLIGHTS
For the three months ended March 31, 2022 and 2021, and the year ended December 31, 2021
(Dollars in thousands)
	Three months ended						Year ended
	March 31,						December 31,
	2022			2021			2021
	(Unaudited)			(Unaudited)			(Audited)
SELECTED AVERAGE BALANCES:
Available for sale securities	$	413,315		$	264,942		$	349,647
Loans		885,159			947,205			908,682
Earning assets		1,562,177			1,376,195			1,483,519
Assets		1,642,141			1,460,833			1,568,417
Deposits		1,438,651			1,268,790			1,372,857
Shareholders' equity		138,604			139,366			147,741
SELECTED KEY DATA:
Net interest margin (tax equivalent)		2.79	%		3.31	%		2.99	%
Return on average assets		0.85	%		1.14	%		0.96	%
Return on average shareholders' equity		10.10	%		11.99	%		10.24	%
Average shareholders' equity to total average assets		8.44	%		9.54	%		9.42	%
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period	$	9,355		$	9,908		$	9,908
Provision for (Recovery of) loan losses		71			(455	)		(1,163	)
Charge-offs		(160	)		(85	)		(762	)
Recoveries		160			164			1,372
Balance, end of period	$	9,426		$	9,532		$	9,355
	March 31, 2022			March 31, 2021			December 31, 2021
	(Unaudited)			(Unaudited)			(Audited)
ASSET QUALITY:
Non-accrual loans	$	3,309		$	3,566		$	3,230
90 days past due and still accruing		-			-			-
Other real estate owned		-			128			-
Total non-performing assets	$	3,309		$	3,694		$	3,230
Non-performing assets to total assets		0.20	%		0.24	%		0.20	%
Loans modifications related to COVID-19	$	-		$	1,857		$	-
Allowance for loan losses to non-performing assets		284.86	%		258.04	%		289.63	%
Allowance for loan losses to total loans		1.06	%		1.01	%		1.06	%
Allowance for loan losses to total loans, excluding PPP loans		1.07	%		1.10	%		1.08	%
LOAN RISK GRADE ANALYSIS:
Percentage of loans by risk grade
Risk Grade 1 (excellent quality)		0.46	%		0.67	%		0.78	%
Risk Grade 2 (high quality)		19.33	%		19.43	%		19.12	%
Risk Grade 3 (good quality)		71.39	%		67.88	%		70.41	%
Risk Grade 4 (management attention)		7.25	%		9.01	%		7.70	%
Risk Grade 5 (watch)		0.83	%		2.28	%		1.23	%
Risk Grade 6 (substandard)		0.74	%		0.73	%		0.76	%
Risk Grade 7 (doubtful)		0.00	%		0.00	%		0.00	%
Risk Grade 8 (loss)		0.00	%		0.00	%		0.00	%
At March 31, 2022, including non-accrual loans, there were no relationships exceeding $1.0 million in the Watch and Substandard risk grades.