Zacks Investment Research has recently initiated coverage of Peoples Bancorp of North Carolina, Inc. (PEBK Quick QuotePEBK - Free Report) , assigning a "Neutral" recommendation to the company's shares. This assessment comes amid a mixed outlook for the company, which has been making notable strides in the community banking services space despite industry challenges.

Peoples Bancorp functions as a bank holding company for Peoples Bank, a state-chartered commercial bank originally founded in 1912. Through its wholly owned subsidiaries, PEBK primarily provides community banking services across the Catawba Valley and surrounding areas via 15 full-service banking offices and several loan production offices across North Carolina.

Peoples Bancorp has demonstrated consistent earnings momentum through the first half of 2025, showcasing a resilient business model even in a shifting rate environment. Second-quarter 2025 net income rose 5.6% year over year to $5.2 million, or 95 cents per share, from $4.9 million, or 89 cents per share, driven by higher net interest and fee income. Profitability metrics remain impressive, with a return on average assets of 1.23% and a return on equity of 15.08%. Net interest margin improved to 3.57% from 3.35% a year earlier, underscoring effective asset-liability management and disciplined deposit pricing. This margin expansion came despite rate cuts from the Federal Reserve in late 2024, signaling the bank’s ability to maintain spreads under varying monetary conditions.

The research report highlights several key factors that could drive Peoples Bancorp’s strong asset quality, with non-performing assets representing 0.28% of total assets as of June 30, 2025. Conservative credit provisioning and modest net recoveries highlight prudent underwriting and a conservative credit stance. Additionally, shareholders’ equity increased to $144 million, or 8.5% of total assets, reflecting PEBK’s healthy internal capital generation.

However, potential investors should consider certain risks outlined in the report. Peoples Bancorp’s loan growth has slowed, while reliance on appraisal management fees introduces some cyclicality given the dependence on North Carolina’s real estate market. PEBK’s operations remain geographically concentrated within the state, exposing it to potential regional economic fluctuations. Additionally, deposit competition among community and regional banks could pressure funding costs, particularly if larger peers begin offering higher yields to retain liquidity.

Peoples Bancorp’s stock has significantly outperformed its industry peers and the broader market over the past year. The valuation suggests that investors are recognizing PEBK’s solid fundamentals and stable performance, but are not anticipating significant near-term growth or multiple expansion.

For a comprehensive analysis of Peoples Bancorp’s financial health, strategic initiatives, and market positioning, you are encouraged to view the full Zacks research report. This in-depth report provides a detailed discussion of the company's operational strategies, financial performance, and the potential risks and opportunities that lie ahead.

Read the full Research Report on Peoples Bancorp here>>>
 

Note: Our initiation of coverage on Peoples Bancorp, which has a modest market capitalization of $149.7 million, aims to equip investors with the information needed to make informed decisions in this promising but inherently risky segment of the market.