NEWS RELEASE
                                                           FEBRUARY 7, 2002

CONTACT:    TONY W. WOLFE
            PRESIDENT AND CHIEF EXECUTIVE OFFICER

            A. JOSEPH LAMPRON
            EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

            828-464-5620, FAX 828-465-6780

FOR IMMEDIATE RELEASE
---------------------

                 PEOPLES BANCORP ANNOUNCES STOCK REPURCHASE PLAN
                 -----------------------------------------------

     Peoples  Bancorp of North Carolina, Inc. (Nasdaq: PEBK), the parent company
of  Peoples  Bank,  announced today that its Board of Directors has authorized a
stock  repurchase  program,  whereby  up  to  $2  million  will  be allocated to
repurchase  the  Company's  common stock.  At December 31, 2001, the Company had
assets  of  $619.5  million  and  stockholder's  equity  of  $45.4  million.

     Any  purchases  under  the  Company's  repurchase program may be made, from
time-to-time,  in  the open market or in privately negotiated transactions.  The
timing  and  amount  of  any  repurchase  of  shares  will  be determined by the
Company's  management,  based  on  its evaluation of market conditions and other
factors.  The  repurchase  program  may be suspended at any time or from time to
time  without  prior  notice.

     "The Board decision to repurchase stock reflects management's confidence in
our  Company's future prospects. We believe this is an attractive opportunity to
enhance  shareholder  value,"  said  Tony  Wolfe,  President and Chief Executive
Officer.

     Peoples Bank operates nine offices throughout Catawba County, one office in
Alexander County and two offices in Lincoln County.   The Company's common stock
is  publicly traded over the counter and is quoted on the Nasdaq National Market
under  the  symbol  "PEBK."  Scott  and Stringfellow, Inc., Ryan, Beck &Co., and
Trident  Securities,  Inc.  are  market  makers  for  the  Company's  shares.


     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, 2000,
     UNDER "SPECIAL CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS" AND
     OTHERWISE IN THE COMPANY'S REPORTS AND FILINGS.