Peoples Bancorp Announces Fourth Quarter Earnings Results and Special Dividend of $0.05/Share

Peoples Bancorp of North Carolina, Inc.

, the parent company of Peoples Bank, reported net income of $1.8 million for the three months ended December 31, 2011, resulting in $0.32 basic and diluted net earnings per share, before adjustment for preferred stock dividends and accretion, as compared to a net loss of $439,000 or $0.08 basic and diluted net loss per share, for the same period one year ago. After adjusting for dividends and accretion on preferred stock, net earnings available to common shareholders for the three months ended December 31, 2011, were $1.4 million or $0.26 basic and diluted net earnings per common share as compared to a $787,000 net loss available to common shareholders or $0.14 basic and diluted net loss per common share, for the same period one year ago. Tony W. Wolfe, President and Chief Executive Officer, attributed the increase in fourth quarter earnings to a decrease in the provision for loan losses and an increase in non-interest income, which were partially offset by an increase in non-interest expense. Year-to-date net earnings as of December 31, 2011 were $5.2 million, or $0.93 basic and diluted net earnings per share, before adjustment for preferred stock dividends and accretion, as compared to $1.8 million, or $0.33 basic and diluted net earnings per share, for the same period one year ago. After adjusting for dividends and accretion on preferred stock, net earnings available to common shareholders for the year ended December 31, 2011 were $3.8 million or $0.68 basic and diluted net earnings per common share as compared to $447,000 or $0.08 basic and diluted net earnings per common share, for the same period one year ago. The increase in year-to-date earnings is primarily attributable to aggregate increases in net interest income and non-interest income and a decrease in the provision for loan losses, which were partially offset by an increase in non-interest expense, as discussed below. As a result of the increase in annual earnings, the Board of Directors of the Company authorized a $0.05 per share special cash dividend. This cash dividend will be distributed on February 17, 2012 to shareholders of record on February 6, 2012.