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NEWS RELEASE 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 July 19 , 2021 Exhibit 99 ( a ) PEOPLES BANCORP ANNOUNCES SECOND QUARTER EARNINGS RESULTS Peoples Bancorp of North Carolina , Inc. ( NASDAQ : PEBK ) , the parent company of Peoples Bank , reported second quarter earnings results with highlights as follows : Second quarter highlights : • Net earnings were $ 4.6 million or $ 0.82 basic net earnings per share and $ 0.80 diluted net earnings per share for the three months ended June 30 , 2021 , as compared to $ 2.6 million or $ 0.46 basic net earnings per share and $ 0.44 diluted net earnings per share for the same period one year ago . The Bank originated 72 Small Business Administration ( SBA ) Paycheck Protection Program ( PPP ) loans , totaling $ 3.3 million , during the three months ended June 30 , 2021. The Bank recognized $ 1.5 million in PPP loan fee income during the three months ended June 30 , 2021 . Year to date highlights : • • Net earnings were $ 8.7 million or $ 1.55 basic net earnings per share and $ 1.51 diluted net earnings per share for the six months ended June 30 , 2021 , as compared to $ 4.9 million or $ 0.87 basic net earnings per share and $ 0.84 diluted net earnings per share for the same period one year ago . The Bank originated 419 SBA PPP loans , totaling $ 29.1 million , during the six months ended June 30 , 2021. The Bank recognized $ 2.5 million in PPP loan fee income during the six months ended June 30 , 2021 . • Core deposits were $ 1.4 billion or 98.09 % of total deposits at June 30 , 2021 , compared to $ 1.1 billion or 97.88 % of total deposits at June 30 , 2020 . Lance A. Sellers , President and Chief Executive Officer , attributed the increase in second quarter net earnings to an increase in net interest income , 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 during the three months ended June 30 , 2021 , compared to the three months ended June 30 , 2020 , as discussed below . Net interest income was $ 11.7 million for the three months ended June 30 , 2021 , compared to $ 10.7 million for the three months ended June 30 , 2020 . The increase in net interest income was due to a $ 879,000 increase in interest income and a $ 70,000 decrease in interest expense . The increase in interest income was primarily due to a $ 823,000 increase in interest income and fees on loans , which was primarily due to a $ 1.5 million increase in fee income on SBA PPP loans . The decrease in interest expense was primarily due to a decrease in Federal Home Loan Bank ( " FHLB ” ) borrowings . Net interest income after the provision for loan losses was $ 11.9 million for the three months ended June 30 , 2021 , compared to $ 9.3 million for the three months ended June 30 , 2020. The provision for loan losses for the three months ended June 30 , 2021 was a credit of $ 226,000 , compared to an expense of $ 1.4 million for the three months ended June 30 , 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID - 19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool . At June 30 , 2021 , the balance of loans with existing modifications as a result of the COVID - 19 pandemic was $ 283,000 . At December 31 , 2020 , the balance of loans with existing modifications as a result of the COVID - 19 pandemic was $ 18.3 million . The Company continues to track all loans that are currently modified or have been modified as a result of the COVID - 19 pandemic . The loan balances associated with COVID - 19 pandemic related modifications have been grouped into their own pool within the Company's Allowance for Loan and Lease Losses ( " ALLL " ) model as they have a higher likelihood of risk , and a higher reserve rate has been applied to that pool . Of all loans modified as a result of the COVID - 19 pandemic , $ 108.2 million have returned to their original terms ; however , the effects of stimulus in the current environment are still unknown , and additional losses may be present in loans that are currently modified and / or loans that were once modified . At December 31 , 2020 , the balance for all loans that were then currently modified or previously modified but returned to their original terms was $ 119.6 million . The $ 11.4 million decrease from December 31 , 2020 to June 30 , 2021 in the balance of currently or previously modified loans that had returned to their original terms is primarily due to loans paid off during the six months ended June 30 , 2021 .