| **UNITED                STATES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **SECURITIES                AND EXCHANGE COMMISSION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Washington,                D.C. 20549**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| **FORM                10-K/A**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **ANNUAL                REPORT****PURSUANT                TO SECTION 13 OR 15(D)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **OF                THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| For                the fiscal year ended: **December                31, 2006**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **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, or a non-accelerated filer.                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Large                Accelerated Filer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  o | Accelerated                Filer |    **x** | Non-Accelerated                Filer |  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. $78,083,522 based on the closing                price of                such common stock on June 30, 2006, which was $26.01 per                share. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Indicate                the number of shares outstanding of each of the registrant's classes                of                common stock, as of the latest practicable date.**3,834,175                shares of common stock, outstanding at February 28,                2007.**                                                                                                                                                                                                                                                                                                                                            |

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**DOCUMENTS        INCORPORATED BY REFERENCE**

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**EXPLANATION        OF AMENDMENT**

**ITEM        15.**
**EXHIBITS,        FINANCIAL STATEMENT SCHEDULES**

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