PEBK earnings increased in the third quarter of 2026 as higher net interest income, lower operating expenses and a smaller credit-loss provision lifted profitability. Peoples Bancorp of North Carolina reported net earnings of $5.7 million on October 19 for the quarter ended September 30, compared with $3.7 million a year earlier.
Key Takeaways
- Diluted earnings rose to $1.05 per share from $0.67 in the third quarter of 2025.
- Net interest margin widened to 3.85%, supported by loan growth and lower funding costs.
- Quarterly credit-loss provisions declined, but provisions for the first nine months remained above the prior-year level.
Table of Contents
- PEBK earnings benefit from stronger interest income
- Lower expenses outweigh weaker appraisal fees
- Quarterly credit costs fall, but year-to-date provisions rise
- Nine-month profit grows alongside the balance sheet
- Conclusion
PEBK earnings benefit from stronger interest income
The company’s third-quarter 2026 earnings release showed basic earnings of $1.08 per share, compared with $0.70 a year earlier. Peoples Bancorp of North Carolina, the parent of Peoples Bank, trades on Nasdaq under the symbol PEBK.
Net interest income reached $16.7 million, up from $15.1 million. That figure measures interest earned after interest expense; it is not total revenue. Net interest margin increased 27 basis points from 3.58% a year earlier.
The company attributed the improvement to higher loan interest income and lower interest expense. Interest income and fees on loans increased by $1.9 million, primarily because of loan growth, while total interest expense fell by $634,000.
Lower rates paid on interest-bearing liabilities reflected Federal Reserve rate reductions from September through December 2025. A decline in time deposits also helped reduce funding costs.
| Item | Details |
|---|---|
| Total loans | $1.30 billion at September 30, 2026, versus $1.20 billion at December 31, 2025. |
| Total deposits | $1.57 billion versus $1.51 billion over the same period. |
| Core deposits | The company-defined non-GAAP measure represented 91.90% of deposits, versus 89.44% at year-end 2025. |
| Loan-loss allowance | 0.82% of total loans at September 30, versus 0.84% at year-end 2025. |
| Equity-to-assets ratio | 8.95% at September 30, versus 9.23% at year-end 2025. |
Lower expenses outweigh weaker appraisal fees
Non-interest expense declined to $15.8 million from $16.9 million. Lower legal fees, debit-card expenses and appraisal management expenses contributed to the reduction, partly offset by higher occupancy and miscellaneous expenses.
Non-interest income fell to $6.7 million from $7.1 million. Appraisal management fee income declined by $718,000 as appraisal volume decreased, although some of that pressure was offset by higher miscellaneous income.
The appraisal slowdown therefore affected both sides of the operating statement: it reduced fee income but also lowered associated expenses. Stronger net interest income and broader expense reductions more than offset the decline in non-interest income.
Quarterly credit costs fall, but year-to-date provisions rise
The third-quarter provision for credit losses fell to $250,000 from $530,000. The company cited lower pooled commercial construction and non-owner-occupied commercial real estate loan balances, together with a $99,000 decline in net charge-offs.
The nine-month comparison was different. Provisions totaled $1.1 million, compared with $585,000 a year earlier, reflecting faster loan growth. Total loans increased by $98.6 million during the first nine months of 2026, versus $45.0 million in the comparable 2025 period.
Non-performing assets were $4.3 million, or 0.25% of total assets, at September 30. The ratio was unchanged from December 31, 2025, although the dollar amount increased slightly from $4.2 million.
Nine-month profit grows alongside the balance sheet
Net earnings for the first nine months reached $15.4 million, compared with $13.2 million a year earlier. Diluted earnings increased to $2.81 per share from $2.41, while net interest income rose to $47.8 million from $43.7 million.
Loans and deposits both increased from year-end 2025. Cash dividends totaled $0.80 per share for the nine-month period, compared with $0.76 a year earlier.
Conclusion
The quarter’s improvement rested on stronger lending income, cheaper funding and lower expenses, rather than fee growth. Full-year results will provide the next comparison of whether those gains continue to offset weaker appraisal activity and higher year-to-date credit provisions.
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