Peoples Bancorp of North Carolina (PEBK) investor relations material

Executive summary

• Net earnings for Q2 2026 were $5.2 million ($0.98 per share, $0.96 diluted), flat compared to Q2 2025, driven by higher net interest income, partially offset by increased provision for credit losses, lower non-interest income, and higher non-interest expense.

• Six-month net earnings reached $9.6 million ($1.81 per share, $1.76 diluted), slightly up from $9.5 million ($1.79 per share, $1.74 diluted) for the same period last year.

• Annualized return on average assets was 1.13% and return on average equity was 12.22% for the six months ended June 30, 2026.

• Q2 results reflect higher net interest income, offset by increased provision for credit losses, lower non-interest income, and higher non-interest expense.

Financial highlights

• Net interest income for Q2 2026 was $16.0 million, up from $14.6 million in Q2 2025; for the six months, it was $31.1 million, up from $28.5 million year-over-year.

• Provision for credit losses increased to $293,000 in Q2 2026 (from a recovery of $213,000 in Q2 2025) and $853,000 for the six months (up from $55,000 year-over-year), reflecting loan growth and higher net charge-offs.

• Non-interest income declined to $7.1 million in Q2 2026 (from $7.7 million in Q2 2025) and $13.6 million for the six months (from $14.2 million), mainly due to lower appraisal management fee income.

• Non-interest expense rose to $16.1 million in Q2 2026 (from $15.8 million) and $31.5 million for the six months (from $30.4 million), driven by higher occupancy, debit card, and compensation expenses.

• Net interest margin was 3.80% for Q2 2026, up from 3.57% in Q2 2025; for the six months, it was 3.74% (up from 3.54%).

Outlook and guidance

• Management expects continued moderate economic growth in the local market area, with stable business conditions and ongoing loan and deposit growth.

• No significant changes in accounting policies or guidance anticipated to materially impact future results.

• Management expects continued loan growth and monitors credit quality closely.

• Forward-looking statements caution about economic, regulatory, and competitive risks.