NEWTON, N.C., May 18 /PRNewswire-FirstCall/ -- The Board of Directors of Peoples Bancorp of North Carolina, Inc., Newton, NC (Nasdaq: PEBK) declared the Company's regular cash dividend for the second quarter of 2007 at their most recent meeting in conjunction with a previously authorized 3-for-2 stock split. The cash dividend was declared at $0.09 per share. As a result of the stock split, each shareholder will receive three shares of stock in exchange for every two shares of stock they hold as of the record date. Shareholders will receive a cash payment in lieu of any fractional shares resulting from the stock split. The cash dividend will be paid based on the number of shares held by shareholders as adjusted by the stock split. The stock split and cash dividend will be paid simultaneously on June 15, 2007. The record date for the stock split and cash dividend is June 4, 2007.

Shareholders are encouraged to enroll in the Company's Dividend Reinvestment and Stock Purchase Plan. For details, you may contact the Investor Relations Department at (828) 464-5620 or (800) 948-7195.

Peoples Bank operates entirely in North Carolina, with eleven offices throughout Catawba County, one office in Alexander County, three offices in Lincoln County, three offices in Mecklenburg County, and one office in Union County. The Bank recently opened a new office in Cornelius, North Carolina. The Company's common stock is publicly traded over the counter and is quoted on the Nasdaq Global Market under the symbol "PEBK."

Statements made in this press release, other than those concerning historical information, should be considered forward-looking statements pursuant to the safe harbor provisions of the Securities Exchange Act of 1934 and the Private Securities Litigation Act of 1995. These forward-looking statements are based on information currently available to management and are subject to various risks and uncertainties, including but not limited to those described in Peoples Bancorp of North Carolina, Inc.'s annual report on Form 10-K for the year ended December 31, 2006, under "General Description of Business" and otherwise in the Company's reports and filings.

SOURCE Peoples Bancorp of North Carolina, Inc.

Contact: Tony W. Wolfe, President and Chief Executive Officer, or A. Joseph Lampron, Executive Vice President and Chief Financial Officer, +1-828-464-5620, fax +1-828-465-6780, both of Peoples Bancorp of North Carolina, Inc.