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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 EXHIBIT 99 ( a ) October 25 , 2021 PEOPLES BANCORP ANNOUNCES THIRD QUARTER EARNINGS RESULTS Peoples Bancorp of North Carolina , Inc. ( NASDAQ : PEBK ) , the parent company of Peoples Bank , reported third quarter earnings results with highlights as follows : Third quarter highlights : • Net earnings were $ 3.4 million or $ 0.61 basic net earnings per share and $ 0.59 diluted net earnings per share for the three months ended September 30 , 2021 , as compared to $ 4.5 million or $ 0.80 basic net earnings per share and $ 0.78 diluted net earnings per share for the same period one year ago . The Bank recognized $ 489,000 in PPP loan fee income during the three months ended September 30 , 2021 , as compared to $ 361,000 in PPP loan fee income for the same period one year ago . Year to date highlights : • Net earnings were $ 12.1 million or $ 2.16 basic net earnings per share and $ 2.10 diluted net earnings per share for the nine months ended September 30 , 2021 , as compared to $ 9.4 million or $ 1.67 basic net earnings per share and $ 1.62 diluted net earnings per share for the same period one year ago . The Bank originated 419 Small Business Administration ( SBA ) Paycheck Protection Program ( PPP ) loans , totaling $ 29.1 million , during the nine months ended September 30 , 2021. The Bank recognized $ 3.0 million in PPP loan fee income during the nine months ended September 30 , 2021 , as compared to $ 361,000 in PPP loan fee income for the same period one year ago . Core deposits were $ 1.4 billion or 98.13 % of total deposits at September 30 , 2021 , compared to $ 1.2 billion or 97.92 % of total deposits at September 30 , 2020 . Net earnings were $ 3.4 million or $ 0.61 basic net earnings per share and $ 0.59 diluted net earnings per share for the three months ended September 30 , 2021 , as compared to $ 4.5 million or $ 0.80 basic net earnings per share and $ 0.78 diluted net earnings per share for the same period one year ago . Lance A. Sellers , President and Chief Executive Officer , attributed the decrease in third quarter net earnings to a decrease in net interest income , a decrease in non - interest income and an increase in non - interest expense , which were partially offset by a decrease in the provision for loan losses during the three months ended September 30 , 2021 , compared to the three months ended September 30 , 2020 , as discussed below . Net interest income was $ 10.6 million for the three months ended September 30 , 2021 , compared to $ 10.9 million for the three months ended September 30 , 2020. The decrease in net interest income is due to a $ 447,000 decrease in interest income , which was partially offset by a $ 81,000 decrease in interest expense . The decrease in interest income is primarily due to a $ 700,000 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 . The increase in interest income on investment securities is primarily due to additional securities purchases due to an increase in excess cash . The decrease in interest expense is primarily due to a decrease in Federal Home Loan Bank ( " FHLB " ) borrowings and a reduction in rates paid on time deposits , partially offset by an increase in interest bearing demand , Money Market and savings deposits . Net interest income after the provision for loan losses was $ 10.7 million for the three months ended September 30 , 2021 , compared to $ 10.4 million for the three months ended September 30 , 2020. The provision for loan losses for the three months ended September 30 , 2021 was a recovery of $ 182,000 , compared to a provision of $ 522,000 for the three months ended September 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 in the general reserve pool . At September 30 , 2021 , there were no loans with existing modifications as a result of the COVID - 19 pandemic . 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 . All loans modified as a result of the COVID - 19 pandemic , totaling $ 100.9 million at September 30 , 2021 , 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 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 $ 18.7 million decrease from December 31 , 2020 to September 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 nine months ended September 30 , 2021 . 1