Peoples Bancorp of North Carolina, Inc. (PEBK): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the core engine driving a successful regional player, and honestly, mapping out Peoples Bancorp of North Carolina, Inc.'s (PEBK) strategy via the Business Model Canvas reveals a focused community banking model that's delivering real results. With $1.73 Billion USD in total assets by September 2025 and a sharp 19.6% net profit margin as of October 2025, their strength lies in that stable, low-cost core deposit base-nearly 90.05% of their funding-which powers their local loan book. Dive below to see exactly how their key activities and resources translate into those solid revenue streams.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Key Partnerships

You're mapping out the external relationships Peoples Bancorp of North Carolina, Inc. relies on to keep the engine running. These aren't just vendors; they are critical enablers for liquidity, compliance, and specialized service delivery outside the core banking footprint.

Correspondent Banks for Liquidity and Services

Peoples Bancorp of North Carolina, Inc., through its subsidiary Peoples Bank, depends on correspondent banking relationships to manage liquidity, facilitate large-dollar transfers, and access services not provided in-house across its North Carolina footprint. While specific counterparty names aren't always public in detail, the need for these relationships is fundamental for a bank with $1.73 billion in Total Assets as of September 30, 2025.

The Bank maintained $1.55 billion in Total Deposits at the end of the third quarter of 2025, with Core Deposits making up 89.65% of that total. Correspondent services are key for managing the flow of these funds and ensuring settlement capabilities beyond the 15 banking offices it operates.

Broadridge Corporate Issuer Services, Inc. for Transfer Agent Functions

For shareholder services, Peoples Bancorp of North Carolina, Inc. partners with Broadridge Corporate Issuer Solutions, Inc. as its transfer agent. This relationship handles the administrative backbone for public shareholders, including managing the Dividend Reinvestment and Stock Purchase Plan. For instance, the Board declared a first quarter 2025 cash dividend of $0.20 per share, payable March 14, 2025, to shareholders of record on March 3, 2025. Broadridge Corporate Issuer Solutions, Inc. handles the record-keeping and distribution logistics for these payments.

You can direct shareholder inquiries to Broadridge Corporate Issuer Solutions, Inc. at shareholder@broadridge.com. This outsourcing keeps internal administrative overhead low, which supports the firm's focus on operating efficiency.

Peoples Investment Services, Inc. for Wealth Management Offerings

Peoples Investment Services, Inc. operates as a wholly-owned subsidiary, providing wealth management and investment services that complement the core banking products. This structure allows Peoples Bancorp of North Carolina, Inc. to capture fee income from non-lending activities. The company reported Non-Interest Income of $3.5 million for the three months ended September 30, 2025. While this figure covers all non-interest sources, the subsidiary is a direct contributor to this revenue stream.

Here's a quick look at the financial context surrounding that fee income:

Real Estate Advisory Services, Inc. for Specialized Property Services

Real Estate Advisory Services, Inc. is another key subsidiary, focused on providing residential and commercial real estate appraisals within the Peoples Bank market area. This partnership is vital for supporting the quality of the loan portfolio. Total loans stood at $1.18 billion as of September 30, 2025. Ensuring accurate valuation through this specialized partner helps manage credit risk associated with that loan volume.

Community Bank Real Estate Solutions, LLC for Real Estate Operations

Community Bank Real Estate Solutions, LLC assists community banks nationally with appraisal management services, and it is also a subsidiary of Peoples Bank. This entity extends the expertise developed internally into a service offering for other institutions. Although specific 2025 revenue from this national service isn't broken out, its existence shows a strategy to monetize internal operational excellence.

The operational scope of the bank itself, which these partners support, includes:

• 15 banking offices in North Carolina as of Q3 2025.
• Loan production offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties.
• Total Deposits of $1.55 billion at September 30, 2025.

Finance: draft 13-week cash view by Friday.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Key Activities

You're looking at the core engine of Peoples Bancorp of North Carolina, Inc. (PEBK)-the things they absolutely must do well to make money and stay compliant. This isn't about the products they sell, but the daily, critical functions that keep the lights on and the balance sheet healthy.

Commercial and Residential Loan Origination and Servicing

The primary activity here is putting deposits to work by originating and managing loans. This is the main driver of interest income. For instance, by the end of Q2 2025, total loans stood at $1.16B, showing continued growth from $1.14B at the end of 2024. Servicing involves managing these assets through their life cycle, which is crucial for asset quality. Delinquency trends remained tight as of September 30, 2025, with 99.0% of the loan portfolio considered current.

Here's a look at the loan interest generation, which feeds directly into the Net Interest Income (NII) figure:

Core Deposit Gathering and Liability Management

To fund those loans, Peoples Bancorp of North Carolina, Inc. must continuously gather stable, low-cost funding, which means focusing on core deposits. This is liability management-keeping the cost of funds down while maintaining a large enough base. As of Q2 2025, the bank reported total deposits of $1.51B, with core deposits making up 90.05% of that total. Keeping that core percentage high is a key activity for stability.

The success of liability management is reflected in the Net Interest Margin (NIM), which management noted improved due to lower rates paid on interest-bearing liabilities following Federal Reserve rate decreases.

• Net Interest Margin (TE) Q3 2025: 3.58%.
• Net Interest Margin (TE) Q2 2025: 3.57%.
• Total Deposits Dec 31, 2024: $1.48B.

Appraisal Management Services for Fee Income

This is a distinct, high-value activity that generates non-interest income. Peoples Bancorp of North Carolina, Inc. runs an appraisal management service, which is a significant, though variable, revenue stream. You noted the Q2 2025 figure, and the trend continued into Q3 2025.

The revenue generated from this activity is tracked closely:

• Appraisal Management Fee Income (Q2 2025): $3.97M.
• Appraisal Management Fee Income (Q1 2025): $3.042M.
• Appraisal Management Fee Income (Q3 2025): Increased YoY by $0.53M.

Regulatory Compliance and Risk Management

This is the non-revenue generating but absolutely essential activity that protects the institution. It involves adhering to all banking laws and managing potential losses before they hit the income statement. A key metric here is the Nonperforming Assets (NPA) ratio and the provision set aside for potential credit issues. For instance, Nonperforming Assets at September 30, 2025, decreased 36% compared to the same date in 2024.

Risk management also involves setting aside reserves. The provision for credit losses in Q3 2025 was $0.53M, up from $0.30M YoY, driven by increased reserves on construction loans. This proactive provisioning is a core risk management function.

Managing a Diversified Loan Portfolio with Few Agricultural Loans

Peoples Bancorp of North Carolina, Inc. focuses on serving individuals and small to medium-sized businesses across its North Carolina footprint. The portfolio is explicitly described as diversified, which is a risk mitigation strategy in itself. The bank has no foreign loans and maintains only a few agricultural loans. While they do offer agricultural financing, including FSA and USDA programs, the overall portfolio mix reflects a concentration away from that sector.

The overall scale of assets managed as of September 30, 2025, was $9.62B in total assets. The efficiency ratio, which reflects how well they manage the expense side relative to revenue, was 57.1% for Q3 2025.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Key Resources

You're looking at the core assets Peoples Bancorp of North Carolina, Inc. relies on to run its business, which is fundamentally about community banking in the Tar Heel State. These aren't just line items on a report; they are the engine and the footprint of the operation.

The sheer scale of the balance sheet is a primary resource. As of September 30, 2025, Peoples Bancorp of North Carolina, Inc. reported total assets amounting to $1.73 Billion USD. This figure represents the total value of everything the company owns, from cash to loans on its books.

Funding stability comes from the deposit base, which is a critical, low-cost resource for any bank. You should note that the stable, low-cost core deposit base represented approximately 90.05% of total deposits as of the second quarter of 2025. That high percentage tells you the bulk of their funding comes from sticky, non-interest-sensitive customer accounts, which is a huge advantage when funding costs fluctuate.

The physical presence anchors the community focus. Peoples Bancorp of North Carolina, Inc. maintains a network of 16 banking offices across North Carolina counties. This physical footprint supports direct customer relationships and local business engagement.

Beyond the numbers, the intangible assets are just as important. This includes deep local market expertise and an established community reputation built since its founding in 1912. That history translates into trust, which is currency in community banking. Also, the bank holding company structure, Peoples Bancorp of North Carolina, Inc., allows for centralized management and potential strategic moves, like acquisitions, though management has stated they don't consider acquisitions necessary for shareholder returns right now.

Here's a quick look at the core balance sheet components as of the third quarter of 2025, giving you a clearer picture of the asset deployment:

The relationship between loans and deposits is telling. The loan-to-deposit ratio, while fluctuating, shows how much of that stable deposit base is actively being lent out to support the local economy. The company's focus remains on operating as a well-capitalized, profitable, and independent community-oriented financial institution.

The operational resources supporting this model include:

• Peoples Bank, the wholly-owned banking subsidiary.
• Subsidiaries like Peoples Investment Services, Inc.
• Real Estate Advisory Services, Inc.
• Community Bank Real Estate Solutions, LLC.

Finance: draft the 13-week cash view by Friday.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Value Propositions

You're looking at the core value Peoples Bancorp of North Carolina, Inc. delivers to its market. It's not just about transactions; it's about being the local financial partner. The bank maintains a strong physical presence, operating 16 banking offices entirely within North Carolina, serving communities like Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake Counties. Also, they have loan production offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties. This focus on local roots is underscored by their Outstanding Community Reinvestment Act (CRA) rating from the Federal Reserve Bank of Cleveland as of March 23, 2020, which shows a commitment to meeting local credit needs. That's a key differentiator in a crowded space.

The personalized, relationship-driven approach translates directly into their lending book. They help local residents and businesses by offering a deep bench of financing options. We see this commitment in their loan portfolio composition, which is actively growing, with total loans at $1.16B as of Q2 2025. Their funding base is very stable, too; core deposits stood at 90.05% of total deposits in Q2 2025. Honestly, stability in funding helps them offer more consistent terms to you.

Here's a quick look at where the loan growth is concentrated, showing the diversification across key segments:

The bank also supports working capital and asset acquisition needs through a variety of other products. You can count on them for:

• Business Loans for expansion or operations
• Business Lines of Credit for working capital
• Equipment Loans with flexible terms
• Letters of Credit for obligations
• Mortgages and HELOCs for personal finance

For you as an investor, Peoples Bancorp of North Carolina, Inc. offers a clear, consistent return mechanism. The Board declared a regular quarterly cash dividend of $0.20 per share for Q2 2025, paid on June 13, 2025. To be fair, they maintained this cadence, announcing another $0.20 per share dividend in November 2025, payable December 15, 2025. This demonstrates a commitment to capital return while managing the balance sheet.

Financial stability is a core value proposition, backed by solid profitability metrics. As of October 2025, the company posted a net profit margin of 19.6%. This figure, while a slight dip from the prior period's 20.3%, still reflects strong underlying profitability, especially when you consider the five-year annual average growth rate of 5.8%. The current Price-To-Earnings Ratio of 9.5x sits below both the US Banks industry average of 11.2x and the peer average of 9.8x, suggesting attractive relative valuation alongside this steady profit generation. If onboarding takes 14+ days, churn risk rises, but for PEBK, the financial metrics show a defintely stable operation.

Finance: draft 13-week cash view by Friday.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Customer Relationships

You're running a regional bank that thrives on knowing its customers by name; that's the core of Peoples Bancorp of North Carolina, Inc.'s approach.

The foundation here is definitely a high-touch, personal relationship banking model, which is what you expect from an institution serving its North Carolina communities since 1912. This model is supported by a relatively lean operational structure, with a total of 294 employees as of late 2025. The bank strives to provide exceptional service across its personal and business solutions, which include checking, savings, vehicle loans, and mortgages.

The physical footprint is key to maintaining that personal touch. Peoples Bank operates 16 banking offices across North Carolina counties like Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake. You also maintain loan production offices in areas including Lincoln, Mecklenburg, Rowan, and Forsyth Counties, extending reach without a full branch presence. This network ensures dedicated local staff and loan officers are accessible for tailored advice.

Still, you're balancing that local presence with necessary digital convenience. Customers use self-service digital tools for everyday transactions, meaning they can bank online or via the mobile app. If a question arises outside of standard hours, support for online banking and debit cards is available by calling 877-802-1212. For general inquiries, the main service lines are 828-466-1765 or 877-802-1212, with representatives available Monday through Friday, 8am to 6pm. You encourage customers to use secure messaging within online banking for sensitive account details.

For your commercial clients, the relationship deepens with direct, in-person advisory. Commercial loan officers act as financial partners, specializing in tailored loan solutions and top-notch treasury management services. These services include cash management and remote deposit capture, helping small to medium-sized businesses and non-profits manage their working capital effectively. Furthermore, investment advisory services are channeled through the subsidiary, Peoples Investment Services, Inc..

Here's a snapshot of the scale of operations as of the third quarter of 2025, which underpins the volume these relationship teams manage:

The focus on personalized service means you also provide resources to help customers manage their finances proactively. This includes:

• Financial Wellness Learning Center access
• Personal and Business Financial Insights tools
• Financial Calculators for planning
• Free access to full credit reports and scores

The President and CEO noted in October 2025 that the bank continued to experience high loan growth, which directly translates to an expanding base of commercial and personal lending relationships that require dedicated attention.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Channels

You're looking at how Peoples Bancorp of North Carolina, Inc. gets its value proposition to the customer base. It's a blend of traditional brick-and-mortar presence and necessary digital tools, which is typical for a community bank of this size in late 2025.

The physical footprint remains a core channel. Peoples Bank, the wholly-owned subsidiary, operates a network of exactly 16 banking offices entirely within North Carolina. These offices are strategically located across several key counties to serve the local market. You see them in Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake Counties.

To support loan origination in adjacent or key growth areas without the overhead of a full branch, Peoples Bancorp of North Carolina, Inc. maintains Loan Production Offices (LPOs). As of the third quarter of 2025, these LPOs are situated in Lincoln, Mecklenburg, Rowan, and Forsyth Counties. This shows a targeted approach to expanding lending relationships beyond the immediate branch footprint.

The digital channels are the modern extension of service delivery. Peoples Bancorp of North Carolina, Inc. provides an online banking portal for comprehensive account management. Also, they offer a mobile banking application, which is critical for consumer access in today's environment. These digital tools help manage the substantial deposit base, which stood at $1.55 billion as of September 30, 2025.

Here's a quick look at the scale of the balance sheet being serviced through these combined channels as of mid-to-late 2025:

The operational capacity through these delivery methods supports the core business activities. You can see the volume of business flowing through both the physical and digital touchpoints.

• Physical Branch Network: 16 banking offices across NC.
• LPO Network: Offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties.
• Digital Access: Online portal for account management.
• Mobile Access: Dedicated application for consumer banking.

The bank's strategy clearly relies on maintaining that local, in-person relationship while ensuring customers can manage their money digitally. Finance: review the Q4 2025 deposit migration trends between branch and digital channels by next Tuesday.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Customer Segments

Peoples Bancorp of North Carolina, Inc. focuses its banking and financial services across a defined geographic footprint in North Carolina, serving distinct customer groups through its 16 banking offices in Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake Counties, plus loan production offices in Lincoln, Mecklenburg, Rowan, and Forsyth Counties.

The core of Peoples Bancorp of North Carolina, Inc.'s funding base is highly localized, reflecting a strong relationship with the communities it serves. Retail deposits, which include both individual consumers and small businesses, are the bedrock of this segment.

• Retail deposits (consumer and small businesses) represent approximately 77% of total deposits.
• Total deposits as of September 30, 2025, stood at $1.55 billion.
• Core deposits, a key measure of stable funding, were 89.65% of total deposits at the end of the third quarter of 2025.
• The average retail customer deposit relationship size is $26,000.
• The median retail customer deposit relationship is significantly smaller at $2,600.

Small-to-medium-sized enterprises (SMEs) are served through commercial lending solutions and treasury management services. The focus is on local business activity, as evidenced by the loan portfolio composition and the bank's geographic concentration.

• The total loan portfolio size as of September 30, 2025, was $1.18 billion.
• The bank has implemented an SBA-specific loan origination system to better serve this segment.
• The overall loan portfolio quality remains strong, with 99.0% of the loan portfolio classified as 'current' as of Q3 2025.

Commercial real estate (CRE) investors and developers represent a significant portion of Peoples Bancorp of North Carolina, Inc.'s lending activity. This segment is critical to the asset side of the balance sheet, though the bank has shown awareness of concentration risk.

The bank's exposure to commercial office space specifically was $184 million, which represented 2.7% of total loans in the third quarter of 2025. To be fair, the bank is actively managing this concentration, as CRE loans represented 191% of its risk-based capital.

Public shareholders are a segment targeted for consistent capital returns, balancing growth retention with direct income distribution. Peoples Bancorp of North Carolina, Inc. maintains a policy of retaining the majority of earnings for balance sheet strength, but still provides a competitive yield.

• The company targets a 40% to 50% dividend payout ratio under normal operating conditions.
• The trailing twelve months (TTM) dividend payout ratio was reported at 30.1% of earnings.
• The most recent declared quarterly cash dividend was $0.20 per share, payable on December 15, 2025.
• The annual dividend per share is reported as $0.96.
• The current dividend yield is around 2.90% based on the annual dividend.
• Tangible book value per common share as of September 30, 2025, was $22.05, with 35,705,369 common shares outstanding.

This dividend policy has seen increases for 1 consecutive year, with an average annual increase of 6.87% over the past five years. Finance: draft 13-week cash view by Friday.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Cost Structure

The cost structure for Peoples Bancorp of North Carolina, Inc. (PEBK) is heavily influenced by funding costs, personnel, and the operational expenses associated with its physical footprint and regulatory environment.

Interest expense on deposits and borrowings represents a core variable cost. For the three months ended September 30, 2025, Peoples Bancorp of North Carolina, Inc. reported an Interest Expense of $6.3 million. This figure compared favorably to the $6.9 million reported for the same period in 2024, reflecting lower rates paid on interest-bearing liabilities following Federal Reserve rate decreases.

Personnel costs (salaries and benefits) are a significant fixed component. While a specific Q3 2025 personnel cost is not isolated, the increase in salaries and benefits was noted as a driver in Q2 2025, rising by $0.34 million sequentially.

Occupancy and equipment expenses for 16 branch locations are a key structural cost. Peoples Bancorp of North Carolina, Inc. operates 16 branches across North Carolina counties, including Catawba, Alexander, Lincoln, Mecklenburg, Iredell, and Wake Counties. While Q2 2025 noted lower occupancy costs overall, that same quarter saw an increase in occupancy expense of $724,000, which included a write-off related to a branch closure in June 2024.

Non-interest expense, which captures most operating costs outside of interest, saw an increase in the latest reported quarter. Total Non-Interest Expense for the three months ended September 30, 2025, was $16.9 million, up from $15.0 million year-over-year for the third quarter of 2024.

The structure of this non-interest expense includes several key drivers:

• Appraisal-related expense was a notable factor in cost increases.
• Higher legal fees were incurred in Q3 2025, including approximately $0.6 million tied to the NCDOT eminent domain case.
• Debit card expense also contributed to the rise in Q3 2025 non-interest expense.

The rise in appraisal fee expense was specifically highlighted in Q2 2025, where it increased by $0.63 million, driven by higher appraisal volumes. For the third quarter of 2025, Appraisal Management Fee Expense was $2.9 million, up from $2.4 million in Q3 2024.

You can see a breakdown of key non-interest expense figures for Q3 2025 compared to the prior year:

Regulatory and compliance costs are embedded within the non-interest expense line, evidenced by the mention of higher legal fees contributing to the Q3 2025 expense increase. The bank's operations are subject to ongoing costs associated with maintaining compliance across its banking and real estate advisory subsidiaries.

Peoples Bancorp of North Carolina, Inc. (PEBK) - Canvas Business Model: Revenue Streams

You're looking at the core ways Peoples Bancorp of North Carolina, Inc. brings in money, which is really the engine room of any bank holding company. For Peoples Bancorp of North Carolina, Inc., the revenue streams are heavily weighted toward traditional banking activities, supplemented by specialized fee income. Here's the quick math on what the second quarter of 2025 showed us.

The primary driver remains the spread between what Peoples Bank earns on its assets and what it pays out on its liabilities. This is the Net Interest Income (NII). For the second quarter of 2025, NII was reported at $14.60M. This figure reflects the benefit of loan growth and a tax-equivalent net interest margin that expanded to 3.57% for the quarter.

Beyond the core lending business, non-interest income provides important diversification. A standout component here is the income generated from managing appraisals. Appraisal management fee income for Q2 2025 hit $3.97M. This specific fee income stream saw a year-over-year increase of $0.79M in Q2 2025, driven by higher appraisal volumes. Still, total non-interest income for the quarter was $7.69M, meaning service charges and other fees make up the remainder.

The final piece of the puzzle, which represents the cash flow from the wholly-owned subsidiary, Peoples Bank, back up to the parent company, Peoples Bancorp of North Carolina, Inc., is often realized through dividends. For Q2 2025, the Board of Directors of Peoples Bancorp of North Carolina, Inc. declared a cash dividend of $0.20 per share. This consistent capital return cadence is a key expected financial outcome from the subsidiary's operations.

Here is a breakdown of the key revenue components for Peoples Bancorp of North Carolina, Inc. based on the second quarter of 2025 results:

You can see how the revenue mix relies on both the interest rate environment and the volume of ancillary services like appraisals. The total revenue for Q2 2025 was reported as $22.5M by some sources, which aligns closely with the sum of NII and total non-interest income.

The revenue streams can be summarized by their nature:

• Interest income from the loan portfolio.
• Interest income from investment securities.
• Fees and interest on loans.
• Appraisal management fee income.
• Other service charges and miscellaneous income.
• Dividends received from Peoples Bank.

To be fair, the total non-interest income of $7.69M is composed of several items, including the appraisal fees and miscellaneous income, which was $1.893M for the quarter. Understanding the composition of that non-interest income is defintely important for assessing revenue quality.

Finance: draft 13-week cash view by Friday.