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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 378 added, 311 removed, 513 unchanged (57% of the section changed)

1 unchanged sentence

NEW PEOPLES BANKSHARES,

BALANCE SHEETS

MARCH 31, 2025

AND DECEMBER 31, 2024

(IN THOUSANDS EXCEPT

PER SHARE AND SHARE DATA)

and due from banks

Interest-bearing

deposits with banks

cash and cash equivalents

securities available-for-sale, at fair value

for credit losses

premises and equipment, net

real estate owned

interest receivable

benefit receivable

assets – operating leases

CONSOLIDATED BALANCE

JUNE 30, 2025 AND

DECEMBER 31, 2024

THOUSANDS EXCEPT PER SHARE AND SHARE DATA)

Cash and due from banks

Interest-bearing deposits with banks

Federal funds sold

Total cash and cash equivalents

Investment securities available-for-sale, at fair value

Loans receivable

Allowance for credit losses

Bank premises and equipment, net

Other real estate owned

Accrued interest receivable

Deferred taxes, net

Insurance benefit receivable

Right-of-use assets – operating leases

Noninterest bearing

Interest-bearing

liabilities – operating leases

interest payable

expenses and other liabilities

SHAREHOLDERS’

Common stock - $ 2.00 par

50,000,000 shares authorized;

and 23,636,724 shares issued and outstanding at

March 31, 2025 and December 31, 2024, respectively

paid-in-capital

other comprehensive loss

Total deposits

Borrowed funds

Lease liabilities – operating leases

Accrued interest payable

Accrued expenses and other liabilities

Total liabilities

SHAREHOLDERS’ EQUITY

liabilities and shareholders’ equity

Common stock - $ 2.00 par value;

50,000,000 shares authorized;

23,600,878 and

23,636,724 shares issued and outstanding at

June 30, 2025 and December 31, 2024, respectively

Additional paid-in-capital

Retained earnings

Accumulated other comprehensive loss

Total shareholders’ equity

Total liabilities and shareholders’ equity

The accompanying notes

2 unchanged sentences

STATEMENTS OF INCOME

FOR THE THREE MONTHS

ENDED MARCH 31, 2025 AND 2024

(IN THOUSANDS EXCEPT

SHARE AND PER SHARE DATA)

For the Three

AND DIVIDEND INCOME

including fees

Interest-earning

deposits with banks

on equity securities (restricted)

FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2025 AND 2024

THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

For the Three Months Ended June 30,

For the Six Months Ended

INTEREST AND DIVIDEND INCOME

Loans including fees

Federal funds sold

Interest-earning deposits with banks

Dividends on equity securities (restricted)

Total interest and dividend income

INTEREST EXPENSE

INTEREST INCOME

FOR (RECOVERY OF) CREDIT LOSSES

INTEREST INCOME AFTER PROVISION

FOR (RECOVERY OF) CREDIT LOSSES

charges and fees

processing and interchange

services fees

(loss) on sale and disposal of premises and equipment

noninterest income

Borrowed funds

Total interest expense

NET INTEREST INCOME

PROVISION FOR CREDIT LOSSES

NET INTEREST INCOME AFTER PROVISION FOR

CREDIT LOSSES

NONINTEREST INCOME

and employee benefits

and equipment expense

processing and telecommunications

operating expenses

Service charges and fees

Card processing and interchange

Financial services fees

Net gain on sale and disposal of premises and equipment

Other noninterest income

Total noninterest income

NONINTEREST EXPENSES

BEFORE INCOME TAXES

Weighted Shares of Common Stock

Salaries and employee benefits

Occupancy and equipment expense

Data processing and telecommunications

Other operating expenses

Total noninterest expenses

INCOME BEFORE INCOME TAXES

INCOME TAX EXPENSE

Earnings per share

Basic and diluted

Average Weighted Shares of Common Stock

Basic and diluted

The accompanying

3 unchanged sentences

OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS

ENDED MARCH 31, 2025 AND 2024

(IN THOUSANDS)

the Three Months Ended

comprehensive income (loss):

securities activity

gains (losses) arising during the period

tax (expense) benefit

FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2025 AND 2024

For the Three Months Ended

For the Six Months Ended

Other comprehensive income (loss):

COMPREHENSIVE INCOME

Investment securities activity

Unrealized gains (losses) arising during the period

Related tax (expense) benefit

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)

TOTAL COMPREHENSIVE INCOME

The accompanying notes

3 unchanged sentences

OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS

ENDED MARCH 31, 2025 AND 2024

FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(IN THOUSANDS INCLUDING

of Common Stock

Paid-in- Capital

Shares of Common Stock

Additional Paid-in- Capital

Accumulated Other

Comprehensive Loss

Shareholders’ Equity

Total Shareholders’ Equity

Balance, December 31, 2023

comprehensive loss, net of tax

Cash dividend declared

($0.07 per share)

of common stock

March 31, 2024

Other comprehensive loss, net of tax

Cash dividend declared ($0.07 per share)

Repurchase of common stock

Balance, March 31, 2024

Other comprehensive income, net of tax

Repurchase of common stock

Balance June 30, 2024

Balance, December 31, 2024

comprehensive income, net of tax

Cash dividend declared

($0.08 per share)

of common stock

March 31, 2025

Other comprehensive income, net of tax

Cash dividend declared ($0.08 per share)

Repurchase of common stock

Balance, March 31, 2025

Other comprehensive loss, net of tax

Repurchase of common stock

Balance June 30, 2025

The accompanying notes

3 unchanged sentences

OF CASH FLOWS

FOR THE THREE MONTHS

ENDED MARCH 31, 2025 AND 2024

(IN THOUSANDS)

FLOWS FROM OPERATING ACTIVITIES

to reconcile net income to net cash provided by

FOR THE SIX MONTHS

ENDED JUNE 30, 2025 AND 2024

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by

operating activities:

and amortization

for (recovery of) credit losses

on bank owned life insurance

on sale of mortgage loans

loss on sale or disposal of premises and equipment

originated for sale

from sales of loans originated for sale

Net amortization/accretion

of bond premiums/discounts

interest receivable

interest payable

expenses and other liabilities

cash provided by operating activities

FLOWS FROM INVESTING ACTIVITIES

of securities available-for-sale

from repayments and maturities of securities available-for-sale

of equity securities (restricted)

for the purchase of premises and equipment

from sale of premises and equipment

from sale of other real estate owned

from bank owned life insurance benefit

cash used in investing activities

FLOWS FROM FINANCING ACTIVITIES

of long-term debt

in noninterest bearing deposits

in interest-bearing deposits

of common stock

cash provided by financing activities

in cash and cash equivalents

and cash equivalents, beginning of the period

and cash equivalents, end of the period

disclosure of cash paid during the period for:

disclosure of non-cash transactions:

in unrealized losses on securities available-for-sale

Depreciation and amortization

Provision for (recovery of) credit losses

Income on bank owned life insurance

Gain on sale of mortgage loans

Gain on sale or disposal of premises and equipment

Gain on sale of other real estate owned

Loans originated for sale

Proceeds from sales of loans originated for sale

Net amortization/accretion of bond premiums/discounts

Deferred tax benefit

Net change in:

Accrued interest receivable

Accrued interest payable

Accrued expenses and other liabilities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Net increase in loans

Purchase of securities available-for-sale

Proceeds from repayments and maturities of securities available-for-sale

Net purchase of equity securities (restricted)

Payments for the purchase of premises and equipment and software

Proceeds from sale of premises and equipment

Proceeds from sale of other real estate owned

Proceeds from bank owned life insurance benefit

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in short-term borrowings

Repayment of long-term debt

Net change in noninterest bearing deposits

Net change in interest-bearing deposits

Dividends paid

Repurchase of common stock

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of the period

Cash and cash equivalents, end of the period

Supplemental disclosure of cash paid during the period for:

Supplemental disclosure of non-cash transactions:

Transfer of loans to other real estate owned

Change in unrealized losses on securities available-for-sale

The accompanying notes

6 unchanged sentences

– New Peoples Bankshares, Inc.

(New Peoples or the Company) is a financial holding company whose principal activity is the ownership

and management of a community bank, New Peoples Bank, Inc.

New Peoples and the Bank are organized and incorporated under

the laws of the Commonwealth of Virginia.

(New Peoples or the Company) is a financial holding company whose principal activity is the

ownership and management of a community bank, New Peoples Bank, Inc.

New Peoples and the Bank are organized and incorporated

under the laws of the Commonwealth of Virginia.

As a state-chartered member bank, the Bank is subject to regulation by the Virginia Bureau

11 unchanged sentences

of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals)

necessary to present fairly the Company’s financial position as of March 31, 2025 and December 31, 2024, and the results of operations

for the three-month periods ended March 31, 2025 and 2024.

The Notes included herein should be read in conjunction with the notes to

the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

necessary to present fairly the Company’s financial position as of June 30, 2025 and December 31, 2024, and the results of operations

for the three- and six-month periods ended June 30, 2025 and 2024.

The Notes included herein should be read in conjunction with the notes

to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a

19 unchanged sentences

None of these reclassifications are considered material

and have no impact on net income.

and have no impact on net income or shareholders’ equity.

The Company’s

25 unchanged sentences

the additional common shares that would have been outstanding if dilutive potential common shares had been issued.

For the three-month

periods ended March 31, 2025 and 2024, there were no potential common shares.

Basic and diluted net income per common share calculations

For the three- and

six-month periods ended June 30, 2025 and 2024, there were no potential common shares.

Basic and diluted net income per common share

calculations follow:

Schedule of basic and diluted net loss per common share calculations

1 unchanged sentence

per share data)

For the three

ended March 31,

average shares outstanding

average dilutive shares outstanding

and diluted earnings per share

For the three months

ended June 30,

For the six months

ended June 30,

Weighted average shares outstanding

Weighted average dilutive shares outstanding

Basic and diluted earnings per share

NOTE 4 CAPITAL

19 unchanged sentences

The capital conservation buffer required is 2.50%.

At March 31, 2025, the Bank had a capital conservation buffer of 7.86%.

At June 30, 2025, the Bank had a capital conservation buffer of 7.86%.

Amounts recorded to accumulated other comprehensive income (loss) are not included in computing regulatory capital.

Management believes

as of March 31, 2025, the Bank met all capital adequacy requirements to which it was subject.

as of June 30, 2025, the Bank met all capital adequacy requirements to which it was subject.

Prompt corrective

6 unchanged sentences

and expansion, and capital restoration plans are required.

At March 31, 2025, the most recent regulatory notifications categorized the

At June 30, 2025, the most recent regulatory notifications categorized the

Bank as well capitalized under the regulatory framework for prompt corrective action.

12 unchanged sentences

commencing January 1, 2023, and elected not to phase in the effect of CECL on regulatory capital.

actual capital amounts and ratios are presented in the following table as of March 31, 2025 and December 31, 2024, respectively.

actual capital amounts and ratios are presented in the following table as of June 30, 2025 and December 31, 2024, respectively.

Schedule of bank’s

3 unchanged sentences

in thousands)

March 31, 2025:

capital to risk weighted assets

3 unchanged sentences

risk weighted assets

December 31, 2024:

capital to risk weighted assets

5 unchanged sentences

The amortized cost and estimated fair

value of available-for-sale (“AFS”) securities as of March 31, 2025 and December 31, 2024 are as follows:

value of available-for-sale (“AFS”) securities as of June 30, 2025 and December 31, 2024 are as follows:

Schedule of securities amortized cost and estimated fair value

in thousands)

March 31, 2025

Government Agencies

7 unchanged sentences

This information is aggregated by the length of time that individual

securities have been in a continuous unrealized loss position as of March 31, 2025 and December 31, 2024.

securities have been in a continuous unrealized loss position as of June 30, 2025 and December 31, 2024.

Schedule of fair value and gross unrealized losses on investment securities

1 unchanged sentence

Months or More

in thousands)

(Dollars in thousands)

Government Agencies

2 unchanged sentences

backed securities

As of March 31, 2025,

As of June 30, 2025,

the available-for-sale portfolio included 179 investments for which the fair market value was less than amortized cost.

10 unchanged sentences

Investment securities

with a carrying value of $ 36.1 million and $ 35.2 million as of March 31, 2025 and December 31, 2024, respectively, were pledged as collateral

with a carrying value of $ 35.5 million and $ 35.2 million as of June 30, 2025 and December 31, 2024, respectively, were pledged as collateral

to secure public deposits and for other purposes required or permitted by law.

There were no sales

of available-for-sale investment securities during the three months ended March 31, 2025 and 2024.

of available-for-sale investment securities during the three or six months ended June 30, 2025 and 2024.

The amortized cost

and fair value of investment securities as of March 31, 2025, by contractual maturity, are shown in the following schedule.

maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without

call or prepayment penalties.

and fair value of investment securities as of June 30, 2025, by contractual maturity, are shown in the following schedule.

Expected maturities

will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment

Schedule of amortized cost and fair value of investment securities contractual maturity

(Dollars in thousands)

Securities Available-for-Sale

in thousands)

Available-for-Sale

in one year or less

one year through five years

five years through ten years

after one year through five years

after five years through ten years

after ten years

5 unchanged sentences

which are included in other assets on the consolidated balance sheet, are restricted from trading and are recorded at a cost of $ 3.0

million and $ 2.7 million as of March 31, 2025 and December 31, 2024, respectively.

The stock has no quoted market value and no ready

market exists.

When evaluating these securities for impairment, their value is determined based on the ultimate recoverability of the

par value rather than by recognizing temporary declines in value.

Equity securities are viewed as long-term investments and management

believes the Company has the ability and the intent to hold these securities until their value is recovered.

million and $ 2.7 million as of June 30, 2025 and December 31, 2024, respectively.

The stock has no quoted market value and no ready market

When evaluating these securities for impairment, their value is determined based on the ultimate recoverability of the par value

rather than by recognizing temporary declines in value.

Equity securities are viewed as long-term investments and management believes

the Company has the ability and the intent to hold these securities until their value is recovered.

Loans receivable

outstanding as of March 31, 2025, and December 31, 2024, are summarized as follows:

outstanding as of June 30, 2025, and December 31, 2024, are summarized as follows:

Schedule of loans receivable outstanding

in thousands)

estate secured:

and land development

real estate loans

installment and all other loans

(Dollars in thousands)

December 31, 2024

Real estate secured:

Construction and land development

Residential 1-4 family

Total real estate loans

Consumer installment and all other loans

Also included in

total loans above are deferred loan fees of $ 2.1 million and $ 2.0 million as of March 31, 2025 and December 31, 2024, respectively.

loan costs were $ 1.9 million and $ 1.9 million, as of March 31, 2025 and

total loans above are deferred loan fees of $ 2.2 million and $ 2.0 million as of June 30, 2025 and December 31, 2024, respectively.

loan costs were $ 2.0 million and $ 1.9 million, as of June 30, 2025 and

December 31, 2024,

1 unchanged sentence

Income from net deferred fees and costs is recognized over the lives of the respective loans as a yield adjustment.

loans repay prior to scheduled maturities any unamortized fee or costs is recognized at that time.

loans repay prior to scheduled maturities any unamortized fees or costs are recognized at that time.

Loans receivable

on nonaccrual status as of March 31, 2025, and December 31, 2024, are summarized as follows:

on nonaccrual status as of June 30, 2025, and December 31, 2024, are summarized as follows:

of loans receivable nonaccrual status

2 unchanged sentences

and land development

Total real estate loans

real estate loans

installment loans and other loans

loans receivable on nonaccrual status

Total interest income

not recognized on nonaccrual loans for the three months ended March 31, 2025, and March 31, 2024, was $ 38,000 and $ 26,000 , respectively.

Total interest income not recognized on nonaccrual loans for the three and six months ended June 30, 2025, and June 30, 2024, was $ 24,000 and $ 62,000 and $ 43,000

and $ 69,000 , respectively.

The Company evaluates

2 unchanged sentences

table presents the unpaid principal balance of collateral dependent loans, which are individually evaluated to determine expected credit

losses, and the related ACL allocated to those loans as March 31, 2025 and December 31, 2024:

losses, and the related ACL allocated to those loans as of June 30, 2025 and December 31, 2024:

of summary of impaired loans

3 unchanged sentences

estate secured:

and land development

real estate loans

1 unchanged sentence

The following table

is an age analysis of past due loans receivable as of March 31, 2025, segregated by class:

is an age analysis of past due loans receivable as of June 30, 2025, segregated by class:

Schedule of analysis of past due loans receivable

in thousands)

estate secured:

real estate loans

installment and all other loans

The following table is an age analysis

of past due loans receivable as of December 31, 2024, segregated by class:

June 30, 2025

(Dollars in thousands)

Real estate secured:

Construction and land

Residential 1-4 family

Total real estate loans

Consumer installment and all other loans

The following

table is an age analysis of past due loans receivable as of December 31, 2024, segregated by class:

December 31, 2024 (Dollars

in thousands)

18 unchanged sentences

credit position at some future date.

- A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral

pledged, if any.

Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the

they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Loans classified doubtful have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the

weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable

and improbable.

- A substandard loan is inadequately protected by the current sound net worth and paying capacity of the

obligor or of the collateral pledged, if any.

Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize

the liquidation of the debt;

they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies

are not corrected.

- Loans classified doubtful have all the weaknesses

inherent in loans classified as substandard, plus the added characteristic that the weaknesses make collection or liquidation in full

on the basis of currently existing facts, conditions, and values highly questionable and improbable.

The following table presents the credit

risk grade of loans by origination year as of March 31, 2025:

risk grade of loans by origination year as of June 30, 2025:

Schedule of credit risk grade of loans

As of March 31, 2025

are in thousands)

As of June 30, 2025

(Dollars are in thousands)

Commercial real estate

period gross charge-offs

and Land Development

Special mention

Total commercial real estate