Notice of 2024 Annual Meeting,

Proxy Statement and

Annual Report

PEOPLES BANCORP OF NORTH CAROLINA, INC.

PROXY STATEMENT

Table of Contents

Page

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS .......................................................................... i

PROXY STATEMENT ............................................................................................................................................... 1

INFORMATION ABOUT THE ANNUAL MEETING ........................................................................................... 1

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .......................... 5

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE ................................................... 7

PROPOSAL 1 ELECTION OF DIRECTORS ......................................................................................................... 7

Director Nominees ................................................................................................................................................... 7

Executive Officers of the Company ...................................................................................................................... 10

How often did our Board of Directors meet during 2023? ................................................................................. 10

What is our policy for director attendance at Annual Meetings? ..................................................................... 11

How can you communicate with the Board or its members? ............................................................................. 11

Board Leadership Structure and Risk Oversight ............................................................................................... 11

Code of Business Conduct and Ethics .................................................................................................................. 12

Diversity of the Board of Directors ...................................................................................................................... 13

How can a shareholder nominate someone for election to the Board of Directors? ........................................ 13

Who serves on the Bank Board? .......................................................................................................................... 13

Board Committees ................................................................................................................................................. 13

Compensation Discussion and Analysis ................................................................................................................... 15

Compensation Committee Processes and Procedures ........................................................................................ 15

Compensation Philosophy ..................................................................................................................................... 15

Elements of the Executive Compensation Program ............................................................................................ 16

Clawback Policy and Amendments to Employment Agreements ..................................................................... 18 2023 Compensation Disclosure Ratio of the Median Annual Total Compensation of All Company

Employees to the Annual Total Compensation of the Company's Chief Executive Officer ........................... 18

EXECUTIVE COMPENSATION ............................................................................................................................ 20

Summary Compensation Table ............................................................................................................................ 20

Outstanding Equity Awards at Fiscal Year End ................................................................................................ 21

Option Exercises and Stock Vested ...................................................................................................................... 21

Pension Benefits ..................................................................................................................................................... 21

Employment Agreements ...................................................................................................................................... 22

Potential Payments upon Termination or Change in Control ........................................................................... 22

Omnibus Plans ....................................................................................................................................................... 23

Pay Versus Performance ....................................................................................................................................... 24

Financial Performance Measures ......................................................................................................................... 26

Analysis of the Information Presented in the Pay Versus Performance Table ................................................ 26

Compensation Actually Paid and Company TSR ............................................................................................... 26

Compensation Actually Paid and Net Income ..................................................................................................... 27

Director Compensation ......................................................................................................................................... 28

Indebtedness of and Transactions with Related Persons ................................................................................... 30

Equity Compensation Plan Information .............................................................................................................. 30

i

PROPOSAL 2 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM .............................................................................................................................................. 31

Audit Fees Paid to Independent Auditors ........................................................................................................... 31

DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS ............................................................................... 32

OTHER MATTERS .................................................................................................................................................. 32

MISCELLANEOUS .................................................................................................................................................. 32

Appendices

Appendix A - Annual Report

ii

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Post Office Box 467

518 West C Street

Newton, North Carolina 28658-0467

(828) 464-5620

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the 2024 Annual Meeting of Shareholders (the "Annual Meeting") of Peoples Bancorp of North Carolina, Inc. (the "Company") will be held virtually on May 2, 2024 at 11:00 a.m., Eastern Time. The purpose of the Annual Meeting is to consider and vote upon the following proposals:

•

To elect 11 persons to serve as members of the Board of Directors until the 2025 Annual Meeting of Shareholders or until their successors are duly elected and qualified;

•

To ratify the appointment of FORVIS, LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2024; and

to consider and act on any other matters that may properly come before the Annual Meeting or any adjournment thereof.

We will again hold our Annual Meeting in a "virtual only" format, via live audio webcast.

Shareholders will have an opportunity to participate remotely (online) in the Annual Meeting regardless of their geographic locations.

Shareholders desiring to attend in the Annual Meeting should email the Company's Assistant Corporate Secretary, Krissy Price, atkprice@peoplesbanknc.com on or before 5:30 p.m., Eastern Time, on Wednesday, May 1, 2024, stating (1) such shareholder's name, address, phone number and the 16-digit identification code that appears on such shareholder's proxy card, (2) the number of shares of the Company's common stock that they held of record as of March 8, 2024 and (3) that they desire to participate in the Annual Meeting. The Company will then take measures to verify such shareholder's identity. After verifying such shareholder's identity, those shareholders desiring to participate remotely at the Annual Meeting will be sent a response email providing information to enable them to participate in the Annual Meeting. Regardless of whether a shareholder intends to participate remotely in the Annual Meeting, all shareholders are encouraged to vote their shares prior to the Annual Meeting, as directed on the proxy cards.

The Board of Directors has established March 8, 2024, as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting. If an insufficient number of shares is present to constitute a quorum at the time of the Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies by the Company.

Your vote is important. We urge you to vote as soon as possible so that your votes will be properly recorded. You may vote by executing and returning your proxy card in the accompanying envelope, or by voting electronically over the Internet or by telephone. Please refer to the proxy card for information on voting electronically and by phone. If you participate remotely at the Annual Meeting, you may vote in person, in which event your proxy will not be used.

By Order of the Board of Directors,

Lance A. Sellers

President and Chief Executive Officer

Newton, North Carolina

March 27, 2024

PEOPLES BANCORP OF NORTH CAROLINA, INC.

______________________________________

PROXY STATEMENT

______________________________________

Annual Meeting of Shareholders

To Be Held on May 2, 2024 _____________________________________

This Proxy Statement is being mailed to our shareholders on or about March 27, 2024, for solicitation of proxies by the Board of Directors (the "Board of Directors" or the "Board") of Peoples Bancorp of North Carolina, Inc. Our principal executive offices are located at 518 West C Street, Newton, North Carolina 28658. Our telephone number is (828) 464-5620.

In this Proxy Statement, the terms "we," "us," "our" and the "Company" refer to Peoples Bancorp of North Carolina, Inc. The term "Bank" refers to Peoples Bank, our wholly-owned, North Carolina-chartered bank subsidiary, and the term "Bank Board" refers to the board of directors of the Bank. The terms "you" and "your" refer to our shareholders, and the term "common stock" refers to our common stock, no par value per share.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 2, 2024. The Notice, Proxy Statement and the Annual Report to Shareholders for the year ended December 31, 2023 are also available athttps://pebk.q4ir.com/filings-financials/proxy-material-and-annual-report/default.aspx.You may also access the above off-site website by going towww.peoplesbanknc.com and clicking on the link.

INFORMATION ABOUT THE ANNUAL MEETING

Your vote is very important. For this reason, our Board of Directors is requesting that you allow your common stock to be represented at the 2024 Annual Meeting of Shareholders by the proxies named on the enclosed proxy card.

When is the Annual Meeting?

May 2, 2024, at 11 a.m., Eastern Time.

What items will be voted on at the Annual Meeting?

  • 1. ELECTION OF DIRECTORS. To elect 11 persons to serve as directors of the Company until the 2025 Annual Meeting of Shareholders or until their successors are duly elected and qualified.

  • 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. To ratify the appointment of FORVIS, LLP ("FORVIS") as the Company's independent registered public accounting firm for

  • fiscal year 2024.

  • 3. OTHER BUSINESS. To consider any other business as may properly come before the Annual Meeting or any adjournment thereof.

Who can vote?

Only holders of record of our common stock at the close of business on March 8, 2024 (the "Record Date") will be entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. On the Record Date, there were

5,455,999 shares of our common stock outstanding and entitled to vote, and 667 shareholders of record.

How do I vote by proxy?

How do I change or revoke my proxy?

You may vote your shares by marking, signing and dating the enclosed proxy card and returning it in the enclosed postage-paid envelope or by voting electronically over the Internet or by telephone using the information on the proxy card. If you return your signed proxy card before the Annual Meeting, the proxies will vote your shares as you direct. The Board of Directors has appointed proxies to represent shareholders who cannot participate at the Annual Meeting.

For the election of directors, you may vote for (1) all of the nominees, (2) none of the nominees, or (3) all of the nominees except those you designate. If a nominee for election as a director becomes unavailable for election at any time at or before the Annual Meeting, the proxies will vote your shares for a substitute nominee. For each other item of business, you may vote "FOR" or "AGAINST" or you may "ABSTAIN" from voting.

If you return your signed proxy card but do not specify how you want to vote your shares, the proxies will vote them "FOR" the election of all of our nominees for directors and "FOR" all other proposals presented in this Proxy Statement in accordance with recommendations from the Board.

If your shares are held in the name of a bank, broker, or other holder of record (each hereafter referred to as a "broker") (i.e., held in "street name"), you will need to obtain a proxy instruction card from the broker holding your shares and return the card as directed by your broker. Your broker is not permitted to vote on your behalf in the election of directors unless you provide specific instructions to your broker by following the instructions from your broker about voting your shares by telephone or over the Internet or completing and returning the voting instruction card provided by your broker. For your vote to be counted in the election of directors, you will need to communicate your voting decision to your broker before the date noted on the proxy instruction card.

We are not aware of any other matters to be brought before the Annual Meeting. If matters other than those discussed above are properly brought before the Annual Meeting, the proxies may vote your shares in accordance with their best judgment.

You can change or revoke your proxy at any time before it is voted at the Annual Meeting in any of three ways: (1) by delivering a written notice of revocation to the Secretary of the Company; (2) by delivering another properly signed proxy card to the Secretary with a more recent date than your first proxy card or by changing your vote by telephone or the Internet; or (3) by participating in and voting at the Annual Meeting. You should deliver your written notice or superseding proxy to the Secretary at our principal executive offices listed above. See information under the heading "How do I participate at theAnnual Meeting?" below for information on how to participate and vote at the Annual Meeting.

How many votes can I cast?

You are entitled to one vote for each share held as of the Record Date on each nominee for election and each other matter presented for a vote at the Annual Meeting. You may not vote your shares cumulatively in the election of directors.

How many votes are required to approve the proposals?

What constitutes a "quorum" for the Annual Meeting?

If a quorum is present at the Annual Meeting, each director nominee will be elected by the affirmative vote of a majority of votes cast, with a plurality vote standard for a contested director election, that is, when the number of director nominees exceeds the number of Board seats for which elections are being held. Abstentions from voting, as well as broker non-votes, if any, are not treated as votes cast and, therefore, will have no effect on the proposal to elect directors.

The proposal to ratify the appointment of the Company's independent registered public accounting firm for 2024 will be approved if the votes cast in favor exceed the votes cast in opposition. Abstentions will not be included in determining the number of votes cast on the proposal, and accordingly, will have no effect on such vote.

Any other matters properly coming before the Annual Meeting for a vote will require the affirmative vote of the holders of a majority of the shares represented at the Annual Meeting and entitled to vote on that matter.

In the event there are insufficient votes present at the Annual Meeting for a quorum or to approve any proposal, the Annual Meeting may be adjourned in order to permit the further solicitation of proxies.

A majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting constitutes a quorum (a quorum is necessary to conduct business at the Annual Meeting). Your shares will be considered part of the quorum if you have voted your shares by proxy or by telephone or Internet. Abstentions, broker non-votes and votes withheld from any director nominee count as shares present at the Annual Meeting for purposes of determining a quorum.

Who pays for the solicitation of proxies?

We will pay the cost of preparing, printing and mailing materials in connection with this solicitation of proxies. In addition to solicitation by mail, our officers, directors and regular employees, as well as those of the Bank, may make solicitations personally, by telephone or otherwise without additional compensation for doing so. We reserve the right to engage a proxy solicitation firm to assist in the solicitation of proxies for the Annual Meeting. We will, upon request, reimburse brokerage firms, banks and others for their reasonable out-of-pocket expenses in forwarding proxymaterials to beneficial owners of stock or otherwise in connection with this solicitation of proxies.

How do I participate at the Annual Meeting?

The Company is holding the Annual Meeting in a "virtual-only" format, which will be conducted via live audio webcast.

Shareholders will not be able to attend the Annual Meeting in person. Participating in the Annual Meeting online enables registered shareholders and duly appointed proxyholders, including beneficial shareholders who have duly appointed themselves as proxyholder, to participate at the Annual Meeting and ask questions, all in real time. Registered shareholders and duly appointed proxyholders can vote at the appropriate times during the Annual Meeting.

Shareholders desiring to participate in the Annual Meeting should email the Company's Assistant Corporate Secretary, Krissy Price, atkprice@peoplesbanknc.com,on or before 5:30 p.m., Eastern Time, on Wednesday, May 1, 2024, stating (1) such shareholder's name, address, phone number and the 16-digit identification code that appears on such shareholder's proxy card, (2) the number of shares of common stock that they held of record as of March 8, 2024 and (3) that they desire to participate in the Annual Meeting. The Company will then take measures to verify such shareholder's identity. After verifying such shareholder's identity, those shareholders desiring to participate in the Annual Meeting will be sent a response email providing information to enable them to attend the Annual Meeting via remote participation. Rules of conduct will also be provided in the response email. Shareholders are encouraged to vote their shares prior to the Annual Meeting, as directed on the proxy cards.

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Peoples Bancorp of North Carolina Inc. published this content on 27 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 March 2024 14:57:17 UTC.