| UNITED      STATES                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| SECURITIES      AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                           |
| Washington,      D.C. 20549                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| FORM      10-K                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                              |
| ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(D)                                                                                                                                                                                                                                                                                                                                |
| OF      THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                              |
| For      the fiscal year ended: December 31,      2007                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Peoples Bancorp of      North Carolina, Inc.                                                                                                                                                                                                                                                                                                                                      |
| (Exact Name of Registrant as      Specified in Its Charter)                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                              |
| North      Carolina                                                                                                                                                                                                                                                                                                                                                               |
| (State      or Other Jurisdiction of Incorporation)                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                              |
| 000-27205                                                                                                                                                                                                                                                                                                                                                                         | 56-2132396 |
| (Commission      File No.)                                                                                                                                                                                                                                                                                                                                                        | (IRS      Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                              |
| 518 West C Street,      Newton, North Carolina                                                                                                                                                                                                                                                                                                                                    | 28658 |
| (Address      of Principal Executive Offices)                                                                                                                                                                                                                                                                                                                                     | (Zip      Code) |
|                                                                                                                                                                                                                                                                                                                                                                              |
| (828)      464-5620                                                                                                                                                                                                                                                                                                                                                               |
| (Registrant’s      Telephone Number, Including Area Code)                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Securities      Registered Pursuant to Section 12(b) of the Act:  None                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Securities      Registered Pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Common Stock, no par      value                                                                                                                                                                                                                                                                                                                                                   |
| (title      of class)                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate      by check mark if the registrant is a well-known seasoned issuer, as      defined in Rule 405 of the Securities Act.                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                              |                                           Yes |  o |         No | x |   |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate      by check mark if the registrant is not required to file reports pursuant      to Section 13 or Section 15(d) of the Act                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                              |                                            Yes |  o |         No | x |   |
| Indicate      by check mark whether the registrant (1) has filed all reports required to      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934      during the preceding 12 months (or for such shorter period that the      registrant was required to file such reports), and (2) has been subject to      such filing requirements for the past 90 days. |
|                                                                                                                                                                                                                                                                                                                                                                              |                                            Yes | x |         No |  o |   |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate      by check mark if disclosure of delinquent filers in response to Item 405      of Regulation S-K is not contained herein, and will not be contained, to      the best of registrant's knowledge, in definitive proxy or information      statements incorporated by reference in                                                                                     |
| Part      III of this Form 10-K or any amendment to this Form      10-K.       x                                                                                                                                                                                                                                                               |   |   |
|                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate      by check mark whether the registrant is a large accelerated filer, and      accelerated filer, a non-accelerated filer or a smaller reporting      company.                                                                                                                                                                                                         |

| Large Accelerated      Filer | o |   | Accelerated      Filer |  x |   | Non-Accelerated      Filer |  o |   | Smaller Reporting      Company |  o |   |
|------------------------------|---|--------|------------------------|---------|--------|----------------------------|---------|--------|--------------------------------|---------|--------|

| Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Exchange Act).                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |          Yes |        o |          No | x |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| State      the aggregate market value of the voting and non-voting common equity held      by non-affiliates computed by reference to the price at which the common      equity was last sold, or the average bid and asked prices of such common      equity, as of the last business day of the registrant’s most recently      completed second fiscal quarter.  $89,182,566 based on the      closing price of such common stock on June 30, 2007, which was $19.80 per      share. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Indicate      the number of shares outstanding of each of the registrant's classes of      common stock, as of the latest practicable date.5,599,234 shares of      common stock, outstanding at February 29,  2008.                                                                                                                                                                                                                                                                                    |

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| PEOPLES BANCORP OF      NORTH CAROLINA, INC.                                  |
|-------------------------------------------------------------------------------|
| FORM 10-K CROSS      REFERENCE INDEX                                          |
|                                                                          |   |   |   |   |   |
|                                                                          |   |   |   |   | Notice of    2008 |
|                                                                          |   |   |   |   | Annual Meeting, |
|                                                                          |   |   | 2007 Form |   | Proxy      Statement |
|                                                                          |   |   | 10-K |   | and Annual      Report |
|                                                                          |   |   | Page |   | Page |
| PART      I                                                                   |   |   |   |   |
| Item 1 -      Business                                                        |   | 3 -9  |   | N/A |
| Item 1A - Risk      Factors                                                   |   | 10 - 12 |   | N/A |
| Item 1B - Unresolved      Staff Comments                                      |   | 12 |   | N/A |
| Item 2 -      Properties                                                      |   | 12 - 13 |   | N/A |
| Item 3 - Legal      Proceedings                                               |   | 13 |   | N/A |
| Item 4 - Submission      of Matters to a Vote of Security Holders             |   | 13 |   | N/A |
|                                                                          |   |   |   |   |   |
| PART      II                                                                  |   |   |   |   |
| Item 5 - Market for      the Common Equity, Related Shareholder Matters and   |   |   |   |   |
|                                                                          | Issuer Purchases of      Equity Securities |   | 14 |   | A-25 |
| Item 6 - Selected      Financial Data                                         |   | 15 |   | A-3 |
| Item 7 -      Management's Discussion and Analysis of Financial Condition and |   |   |   |   |
|                                                                          | Results of      Operations |   | 15 |   | A-4  -       A-25 |
| Item 7A -      Quantitative and Qualitative Disclosures About Market Risk     |   | 15 |   | A-23 |
| Item 8 - Financial      Statements and Supplementary Data                     |   | 15 |   | A-27  -       A-56 |
| Item 9 - Changes in      and Disagreements with Accountants on Accounting     |   |   |   |   |
|                                                                          | and Financial      Disclosure |   | 15 |   | N/A |
| Item 9A - Controls      and Procedures                                        |   | 15 |   | N/A |
| Item 9B - Other      Information                                              |   | 15 |   | N/A |
|                                                                          |   |   |   |   |   |
| PART      III                                                                 |   |   |   |   |
| Item 10 - Directors      and Executive Officers of the Registrant             |   | 16 |   | A-57 |
| Item 11 - Executive      Compensation                                         |   | 16 |   | 11 - 31 |
| Item 12 - Security      Ownership of Certain Beneficial Owners and Management |   | 16 |   | 4 - 7 |
| Item 13 - Certain      Relationships and Related Transactions                 |   | 16 |   | 32 |
| Item 14 - Principal      Accountant Fees and Services                         |   | 16 |   | 35 |
|                                                                          |   |   |   |   |   |
| PART      IV                                                                  |   |   |   |   |
| Item 15 - Exhibits      and Financial Statement Schedules                     |   | 17  -       19 |   | N/A |
|                                                                          |   |   |   |   |   |
| Signatures                                                                    |   | 20 |   | N/A |

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| ●                                                                                                                     | actual or      acticipated fluctuation in our operating results;                                                                                                    |
|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           ●      | changes in interest      rates;                                                                                                                                     |
|                           ● | changes in the legal      or regulatory environment in which we operate;                                                                                            |
|                      ● | press releases,      announcements or publicity relating to us or our competitors or relating      to trends in our industry;                                       |
|                           ● | changes in      expectations as to our future financial performance, including financial      estimates or recommendations by securities analysts and    investors; |
|                           ● | future sales of our      common stock;                                                                                                                              |
|                           ● | changes in economic      conditions in our market, general conditions in the U.S. economy,      financial markets or the banking industry; and                      |
|                           ● | other developments      affecting our competitors or us.                                                                                                            |

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|   |  Owned Corporate      Office518      West C StreetNewton,      North Carolina  28658 420      West A StreetNewton,      North Carolina 28658 2619      North Main AvenueNewton,      North Carolina  28658 213      1st Street, WestConover,      North Carolina  28613 3261      East Main StreetClaremont,      North Carolina  28610 6125      Highway 16 SouthDenver,      North Carolina  28037 5153      N.C. Highway 90EHiddenite,      North Carolina  28636 200      Island Ford RoadMaiden,      North Carolina  28650 3310      Springs Road NEHickory,      North Carolina  28601 142      South Highway 16Denver,      North Carolina  28037 106      North Main StreetCatawba,      North Carolina 28609 2050      Catawba Valley BoulevardHickory,      North Carolina  28601 800      E. Arrowood RoadCharlotte,      NC  28217 1074      River HighwayMooresville,      NC, 28117(Opened      January 2008)  |  Leased 1333      2nd Street NEHickory,      North Carolina  28601 1910      East Main StreetLincolnton,      North Carolina  28092 760      Highway 27 WestLincolnton,      North Carolina 28092 102      Leonard AvenueNewton,      North Carolina 28658 6300      South BoulevardSuite      100Charlotte,      North Carolina 28217 4451      Central AvenueSuite      ACharlotte,      North Carolina  28205 3752/3754      Highway 16 NorthDenver,      North Carolina  28037 501      West Roosevelt BoulevardMonroe,      NC  28110 9624-I      Bailey RoadCornelius,      North Carolina  28031 4011      Capital BoulevardRaleigh,      NC  27604(Opened      January 2008) |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 5. | MARKET FOR REGISTRANT'S COMMON      EQUITY, RELATED SHAREHOLDER  MATTERSAND ISSUER PURCHASES OF EQUITY      SECURITIES |
|---------|----------------------------------------------------------------------------------------------------------------------------------|

|  ISSUER      PURCHASES OF EQUITY SECURITIES                                                                                                                                                                      |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| Period                                                                                                                                                                                                                |   | Total      Number      of Shares      Purchased                                                                                       |   | Average      Price      Paid per      Share                                                                                                                                                                                                                                                                          |   | Total      Number      of Shares      Purchased      as Part      of Publicly      Announced      Plans      or Programs                                                                                                                                                  |   |   |   Maximum Number (or Approximate Dollar Value) of Shares tht May Yet Be Purchased Under the Plans or Programs |   |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| January      1 - 31, 2007                                                                                                                                                                                             |   |                 -       |   |  $                            -                                 |   |                      -                                                                                              |   | $      | 2,000,000 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| February      1 - 28, 2007                                                                                                                                                                                            |   |                 -       |   |                 -                                                                             |   |                      -                                                                                              |   | $      | 2,000,000 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| March      1 - 31, 2007                                                                                                                                                                                               |   |                 -       |   |                 -                                                                             |   |                      -                                                                                              |   | $      | 2,000,000 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| April      1 - 30, 2007                                                                                                                                                                                               |   |           2,070                                                                     |   |           19.51                                                                                                                            |   |                      -                                                                                              |   | $      | 2,000,000 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| May      1 - 31, 2007                                                                                                                                                                                                 |   |         30,824                                                                                |   |           19.41                                                                                                                            |   |              30,000                                                                                                                                                                                      |   | $      | 1,418,000 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| June      1 - 30, 2007                                                                                                                                                                                                |   |         25,000                                                                                |   |                   20.25                                                                                                          |   |              25,000                                                                                                                                                                                      |   | $      | 911,750 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| July      1 - 31, 2007                                                                                                                                                                                                |   |         45,000                                                                                |   |           18.89                                                                                                                            |   |              45,000                                                                                                                                                                                      |   | $      | 61,650 |  (1) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| August      1 - 31, 2007                                                                                                                                                                                              |   |              940                                                     |   |           17.81                                                                                                                            |   |                      -                                                                                              |   |   |                                -           |   |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| September      1 - 30, 2007                                                                                                                                                                                           |   |         19,000                                                                                |   |           17.73                                                                                                                            |   |              19,000                                                                                                                                                                                      |   |   |                        56,000 |  (2) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| October      1 - 31, 2007                                                                                                                                                                                             |   |           1,440                                                                     |   |           16.79                                                                                                                            |   |                      -                                                                                              |   |   |                                -      |   |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| November      1 - 30, 2007                                                                                                                                                                                            |   |         31,857                                                                                |   |           17.01                                                                                                                            |   |              31,497                                                                                                                                                                                      |   |   |                        24,503 |  (2) |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| December      1 - 31, 2007                                                                                                                                                                                            |   |                 -       |   |                 -                                                                             |   |                            -                            |   |   |                                -      |   |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
|  Total                                                                                                                                                                                                           |   |     156,131                                                                                                       |   |  $                  18.67                                                                                    |   |          150,497                                                                                                                                       |   |   |   |   |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| (1)      Reflects dollar value of shares that may yet be purchased under the Stock      Repurchase Plan through the end of November 30, 2007 as authorized by the      Company's Board of Directors in November 2006. |
|                                                                                                                                                                                                                  |   |                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                      |   |   |   |   |
| (2) Reflects      number of shares that may yet be purchased under the Stock Repurchase Plan      through the end of August 31, 2008 as authorized by the Company's Board of      Directors in August 2007.      |

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| ITEM      7. | MANAGEMENT'S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND  RESULTS OF      OPERATIONS |
|--------------|------------------------------------------------------------------------------------------------------------|

| ITEM      7A. | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK |
|---------------|----------------------------------------------------------------|

| ITEM      8. | FINANCIAL      STATEMENTS AND SUPPLEMENTARY DATA |
|--------------|--------------------------------------------------|

| ITEM      9. | CHANGES      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL      DISCLOSURE |
|--------------|------------------------------------------------------------------------------------------------|

| ITEM      9A. | CONTROLS      AND PROCEDURES |
|---------------|------------------------------|

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| ITEM      10. | DIRECTORS      AND EXECUTIVE OFFICERS OF THEREGISTRANT |
|---------------|--------------------------------------------------------|

| ITEM      11. | EXECUTIVE      COMPENSATION |
|---------------|-----------------------------|

| ITEM      12. | SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT |
|---------------|----------------------------------------------------------------------|

| ITEM      13. | CERTAIN      RELATIONSHIPS AND RELATEDTRANSACTIONS |
|---------------|----------------------------------------------------|

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PART IV

| ITEM      15. | EXHIBITS      AND FINANCIAL STATEMENT SCHEDULES |
|---------------|-------------------------------------------------|

| 15(a)1. |   Consolidated      Financial Statements (contained in the Annual Report attached hereto as      Exhibit (13) and incorporated herein by  reference)  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Reports      of Independent Registered Public AccountingFirm |
|--------|-----|--------------------------------------------------------------|

|   | (b) | Consolidated      Balance Sheets as of December 31, 2007 and2006 |
|--------|-----|------------------------------------------------------------------|

|   | (c) | Consolidated      Statements of Earnings for the Years Ended December 31, 2007, 2006 and      2005 |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (d) | Consolidated      Statements of Changes in Shareholders’ Equity for the Years Ended December      31, 2007, 2006 and 2005 |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Consolidated      Statements of Comprehensive Income for the Years Ended December 31, 2007,      2006 and 2005 |
|--------|-----|----------------------------------------------------------------------------------------------------------------|

|   | (f) | Consolidated      Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and      2005 |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | (g) | Notes      to Consolidated FinancialStatements |
|--------|-----|------------------------------------------------|

| 15(a)2. |  Consolidated      Financial Statement Schedules |
|---------|-------------------------------------------------------|

| 15(a)3. |  Exhibits |
|---------|----------------|

|   |  Exhibit      (3)(i)  | Articles      of Incorporation of Peoples Bancorp of North Carolina, Inc.,      incorporated |
|--------|----------------------------|----------------------------------------------------------------------------------------------|
|   |                       | incorporated      by reference to Exhibit (3)(i) to the Form 8-A filed with    the           |
|   |                       | Securities      and Exchange Commission on September 2, 1999                                 |
|   |                       |                                                                                         |
|   |  Exhibit      (3)(ii) | Amended      and Restated Bylaws of Peoples Bancorp of North  Carolina,                      |
|   |                       | Inc.,      incorporated by reference to Exhibit (3)(ii) to the Form 10-Q      filed          |
|   |                       | with      the Securities and Exchange Commission on November 7,  2007                        |
|   |                       |                                                                                         |
|   |  Exhibit      (4)     | Specimen      Stock Certificate, incorporated by reference to Exhibit (4)    to              |
|   |                       | the      Form 8-A filed with the Securities and Exchange Commission    on                    |
|   |                       | September      2, 1999                                                                       |
|   |                       |                                                                                         |
|   |  Exhibit      (10)(a) | Employment      Agreement between Peoples Bank and Tony W. Wolfe                             |
|   |                       | incorporated      by reference to Exhibit (10)(a) to the Form 10-K filed  with               |
|   |                       | the      Securities and Exchange Commission on March 30, 2000                                |
|   |                       |                                                                                         |
|   |  Exhibit      (10)(b) | Employment      Agreement between Peoples Bank and Joseph F. Beaman,                         |
|   |                       | Jr.      incorporated by reference to Exhibit (10)(b) to the Form 10-K      filed            |
|   |                       | with      the Securities and Exchange Commission on March 30,2000                            |
|   |                       |                                                                                         |
|   |  Exhibit      (10)(c) | Employment      Agreement between Peoples Bank and William D. Cable,Sr.                      |
|   |                       | incorporated      by reference to Exhibit (10)(d) to the Form 10-K filed  with               |
|   |                       | the      Securities and Exchange Commission on March 30,  2000                               |

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|   | Exhibit      (10)(d)    | Employment      Agreement between Peoples Bank and Lance A. Sellers                     |
|--------|-------------------------|-----------------------------------------------------------------------------------------|
|   |                    | incorporated      by reference to Exhibit (10)(e) to the Form 10-K filed  with          |
|   |                    | the      Securities and Exchange Commission on March 30, 2000                           |
|   |                    |                                                                                    |
|   | Exhibit      (10)(e)    | Peoples      Bancorp of North Carolina, Inc. Omnibus Stock Ownership  and               |
|   |                    | Long      Term Incentive Plan incorporated by reference to Exhibit (10)(f)      to      |
|   |                    | the      Form 10-K filed with the Securities and Exchange Commission    on              |
|   |                    | March      30, 2000                                                                     |
|   |                    |                                                                                    |
|   | Exhibit      (10)(e)(i) | Amendment      No. 1 to the Peoples Bancorp of North Carolina, Inc.                     |
|   |                    | Omnibus      Stock Ownership and Long Term Incentive Plan  incorporated                 |
|   |                    | by      reference to Exhibit (10)(e)(i) to the Form 10-K filed with      the            |
|   |                    | Securities      and Exchange Commission on March 15, 2007                               |
|   |                    |                                                                                    |
|   | Exhibit      (10)(f)    | Employment      Agreement between Peoples Bank and A. Joseph Lampron,                   |
|   |                    | incorporated      by reference to Exhibit (10)(g) to the Form 10-K filed with      the  |
|   |                    | Securities      and Exchange Commission on March 28, 2002                               |
|   |                    |                                                                                    |
|   | Exhibit      (10)(g)    | Peoples      Bank Directors' and Officers' Deferral Plan, incorporated    by            |
|   |                    | refernence      to Exhibit (10)(h) to the Form 10-K filed with the Securities      and  |
|   |                    | Exchange      Commission on March 28, 2002                                              |
|   |                    |                                                                                    |
|   | Exhibit      (10)(h)    | Rabbi      Trust for the Peoples Bank Directors' and Officers' Deferral      Plan,      |
|   |                    | incorporated      by reference to Exhibit (10)(i) to the Form 10-K filed with      the  |
|   |                    | Securities      and Exchange Commission on March 28, 2002                               |
|   |                    |                                                                                    |
|   | Exhibit      (10)(i)    | Description      of Service Recognition Program maintained by Peoples  Bank,            |
|   |                    | incorporated      by reference to Exhibit (10)(i) to the Form 10-K filed with      the  |
|   |                    | Securities      and Exchange Commission on March 27, 2003                               |
|   |                    |                                                                                    |
|   | Exhibit      (10)(j)    | Capital      Securities Purchase Agreement dated as of June 26, 2006, by      and       |
|   |                    | among      Peoples Bancorp of North Carolina, Inc., PEBK Capital Trust    II            |
|   |                    | and      Bear, Sterns Securities Corp. incorporated by reference to      Exhibit        |
|   |                    | Exhibit      10(j) to the Form 10-Q filed with the Securities and    Exchange           |
|   |                    | Commission      on November 13, 2006                                                    |
|   |                    |                                                                                    |
|   | Exhibit      (10)(k)    | Amended      and Restated Trust Agreement of PEBK Capital Trust II,    dated            |
|   |                    | dated      as of June 28, 2006 incorporated by reference to Exhibit (10)(k) to      the |
|   |                    | Form      10-Q filed with the Securities and Exchange Commission  on                    |
|   |                    | November      30, 2006                                                                  |
|   |                    |                                                                                    |
|   | Exhibit      (10)(l)    | Guarantee      Agreement of Peoples Bancorp of North Carolina, Inc.  dated              |
|   |                    | as      of June 28, 2006 incorporated by reference to Exhibit (10)(l) to      the       |
|   |                    | Form      10-Q filed with the Securities and Exchange Commission  on                    |
|   |                    | November      13, 2006                                                                  |
|   |                    |                                                                                    |
|   | Exhibit      (10)(m)    | Indenture,      dated as of June 28, 2006, by and between Peoples Bancorp    of         |
|   |                    | North      Carolina, Inc. and LaSalle Bank National Association, as      Trustee,       |
|   |                    | relating      to Junior Subordinated Debt Securities Due September 15,    2036          |
|   |                    | incorporated      by reference to Exhibit (10)(m) to the Form 10-Q filed  with          |
|   |                    | the      Securities and Exchange Commission on November 13, 2006                        |
|   |                    |                                                                                    |
|   | Exhibit      (11)       | Statement      regarding computation of per share earnings                              |
|   |                    |                                                                                    |
|   | Exhibit      (12)       | Statement      regarding computation of ratios                                          |
|   |                    |                                                                                    |
|   | Exhibit      (13)       | 2007      Annual Report of Peoples Bancorp of North Carolina,  Inc.                     |

----

|   | Exhibit      (14)    | Code      of Business Conduct and Ethics of Peoples Bancorp of  North                |
|--------|----------------------|--------------------------------------------------------------------------------------|
|   |                 | Carolina,      Inc., incorporated by reference to Exhibit (14) to the Form      10-K |
|   |                 | filed      with the Securities and Exchange Commission on March 25,    2005          |
|   |                 |                                                                                 |
|   | Exhibit      (21)    | Subsidiaries      of the Registrant                                                  |
|   |                 |                                                                                 |
|   | Exhibit      (23)    | Consent      of Porter Keadle Moore, LLP                                             |
|   |                 |                                                                                 |
|   | Exhibit      (31)(a) | Certification      of principal executive officer pursuant to section 302 of    the  |
|   |                 | Sarbanes-Oxley      Act of 2002                                                      |
|   |                 |                                                                                 |
|   | Exhibit      (31)(b) | Certification      of principal financial officer pursuant to section 302 of    the  |
|   |                 | Sarbanes-Oxley      Act of 2002                                                      |
|   |                 |                                                                                 |
|   | Exhibit      (32)    | Certification      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant  to       |
|   |                 | Section      906 of the Sarbanes-Oxley Act of2002                                    |

----

| SIGNATURES                                                                                                                                                                                                                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                            |
| Pursuant      to the requirements of Section 13 or 15(d) of the Securities Exchange Act      of 1934, the registrant has duly caused this report to be signed on its      behalf by the undersigned, thereunto duly authorized. |
|                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                            | PEOPLES      BANCORP OF NORTH CAROLINA, INC. |
|                                                                                                                                                                                                                            | (Registrant) |

|   | By:    | /s/ Tony W.      Wolfe                     |
|--------|--------|--------------------------------------------|
|   |   | Tony W.    Wolfe                           |
|   |   | President and Chief      Executive Officer |

|                                                                                                                                                                                                                         |                  Date: March 12, 2008 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                         |                                                                                         |
|                                                                                                                                                                                                                         |
| Pursuant      to the requirements of the Securities Exchange Act of 1934, this report      has been signed below by the following persons on behalf of the registrant      and in the capacities and on the dates indicated: |
|                                                                                                                                                                                                                         |
| Signature                                                                                                                                                                                                                    |                                                                                         | Title |   | Date |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Tony W. Wolfe                                                                                                                                                                                                       |                                                                                         | President      and Chief Executive Officer |   | March      12, 2008 |
| Tony      W. Wolfe                                                                                                                                                                                                           |                                                                                         | (Principal      Executive Officer) |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      James S. Abernethy                                                                                                                                                                                                  |                                                                                         | Director |   | March      12, 2008 |
| James      S. Abernethy                                                                                                                                                                                                      |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Robert C. Abernethy                                                                                                                                                                                                 |                                                                                         | Chairman      of the Board and Director |   | March      12, 2008 |
| Robert      C. Abernethy                                                                                                                                                                                                     |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Douglas S. Howard                                                                                                                                                                                                   |                                                                                         | Director |   | March      12, 2008 |
| Douglas      S. Howard                                                                                                                                                                                                       |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      A. Joseph Lampron                                                                                                                                                                                                   |                                                                                         | Executive      Vice President and Chief |   | March      12, 2008 |
| A.      Joseph Lampron                                                                                                                                                                                                       |                                                                                         | Financial      Officer (Principal Financial |   |   |
|                                                                                                                                                                                                                         |                                                                                         | and      Principal Accounting Officer) |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      John W. Lineberger, Jr.                                                                                                                                                                                             |                                                                                         | Director |   | March      12, 2008 |
| John      W. Lineberger, Jr.                                                                                                                                                                                                 |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Gary E. Matthews                                                                                                                                                                                                    |                                                                                         | Director |   | March      12, 2008 |
| Gary      E. Matthews                                                                                                                                                                                                        |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Billy L. Price, Jr., M.D.                                                                                                                                                                                           |                                                                                         | Director |   | March      12, 2008 |
| Billy      L. Price, Jr., M.D.                                                                                                                                                                                               |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Larry E. Robinson                                                                                                                                                                                                   |                                                                                         | Director |   | March      12, 2008 |
| Larry      E. Robinson                                                                                                                                                                                                       |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      William Gregory Terry                                                                                                                                                                                               |                                                                                         | Director |   | March      12, 2008 |
| William      Gregory Terry                                                                                                                                                                                                   |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Dan Ray Timmerman, Sr.                                                                                                                                                                                              |                                                                                         | Director |   | March      12, 2008 |
| Dan      Ray Timmerman, Sr.                                                                                                                                                                                                  |                                                                                         |   |   |   |
|                                                                                                                                                                                                                         |                                                                                         |   |   |   |
| /s/      Benjamin I. Zachary                                                                                                                                                                                                 |                                                                                         | Director |   | March      12, 2008 |
| Benjamin      I. Zachary                                                                                                                                                                                                     |                                                                                         |   |   |   |

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