Document And Entity Information
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Document And Entity Information
3 Months Ended
Mar. 31, 2012
May 08, 2012
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2012  
Document Fiscal Year Focus 2012  
Document Fiscal Period Focus Q1  
Entity Registrant Name NEW PEOPLES BANKSHARES INC  
Entity Central Index Key 0001163389  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   10,010,178

Consolidated Statements Of Income (Loss)
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Consolidated Statements Of Income (Loss) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
INTEREST AND DIVIDEND INCOME    
Loans including fees $ 8,748 $ 10,888
Federal funds sold   9
Interest-earning deposits with banks 47 26
Investments 201 39
Dividends on equity securities (restricted) 26 22
Total Interest and Dividend Income 9,022 10,984
INTEREST EXPENSE    
Demand 26 45
Savings 62 186
Time deposits below $100,000 875 1,388
Time deposits above $100,000 587 805
FHLB Advances 181 221
Other borrowings 44 61
Trust Preferred Securities 122 108
Total Interest Expense 1,897 2,814
NET INTEREST INCOME 7,125 8,170
PROVISION FOR LOAN LOSSES 1,950 1,145
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,175 7,025
NONINTEREST INCOME    
Service charges 557 552
Fees, commissions and other income 615 574
Insurance and investment fees 109 98
Net realized gains on sale of investment securities 72  
Life insurance investment income 114 87
Total Noninterest Income 1,467 1,311
NONINTEREST EXPENSES    
Salaries and employee benefits 3,598 3,913
Occupancy and equipment expense 1,099 1,025
Advertising and public relations 90 85
Data processing and telecommunications 439 406
FDIC insurance premiums 431 675
Other real estate owned and repossessed vehicles, net 1,974 244
Other operating expenses 1,356 1,265
Total Noninterest Expenses 8,987 7,613
INCOME (LOSS) BEFORE INCOME TAXES (2,345) 723
INCOME TAX EXPENSE 190 174
NET INCOME (LOSS) $ (2,535) $ 549
Earnings (Loss) Per Share    
Basic $ (0.25) $ 0.05
Fully Diluted $ (0.25) $ 0.05
Average Weighted Shares of Common Stock    
Basic 10,010,178 10,010,178
Fully Diluted 10,010,178 10,010,178

Consolidated Statements Of Comprehensive Income
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Consolidated Statements Of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Statement of Other Comprehensive Income [Abstract]    
Net income (loss) $ (2,535) $ 549
Investment Securities Activity    
Unrealized gains (losses) arising during the period (182) 21
Tax related to unrealized gains (losses) 62 (7)
Reclassification of realized (gains) during the period (72)  
Tax related to realized gains 24  
Total other comprehensive income (loss) (168) 14
Total comprehensive income (loss) $ (2,703) $ 563

Consolidated Balance Sheets
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Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
ASSETS    
Cash and due from banks $ 19,086 $ 18,306
Interest-bearing deposits with banks 71,683 72,170
Federal funds sold 58 77
Total Cash and Cash Equivalents 90,827 90,553
Investment Securities Available-for-sale 43,497 32,434
Loans receivable 573,752 597,816
Allowance for loan losses (18,031) (18,380)
Net Loans 555,721 579,436
Bank premises and equipment, net 32,897 33,141
Equity securities (restricted) 3,573 3,573
Other real estate owned 15,009 15,092
Accrued interest receivable 2,705 3,067
Life insurance investments 11,465 11,351
Goodwill and other intangibles 102 123
Deferred taxes 7,086 7,220
Other assets 5,565 4,394
Total Assets 768,447 780,384
Demand Deposits [Abstract]    
Noninterest bearing 112,812 109,629
Interest-bearing 61,994 58,459
Savings deposits 98,861 94,569
Time deposits 425,418 445,658
Total Deposits 699,085 708,315
Federal Home Loan Bank advances 17,683 17,983
Accrued interest payable 1,873 1,796
Accrued expenses and other liabilities 1,690 1,471
Other borrowings 5,450 5,450
Trust preferred securities 16,496 16,496
Total Liabilities 742,277 751,511
Commitments and Contingencies      
STOCKHOLDERS' EQUITY    
Common stock - $2.00 par value; 50,000,000 shares authorized; 10,010,178 shares issued and outstanding 20,020 20,020
Additional paid-in-capital 21,689 21,689
Retained earnings (deficit) (15,620) (13,085)
Accumulated other comprehensive income 81 249
Total Stockholders' Equity 26,170 28,873
Total Liabilities and Stockholders' Equity $ 768,447 $ 780,384

Consolidated Balance Sheets (Parenthetical)
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Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2012
Dec. 31, 2011
Consolidated Balance Sheets [Abstract]    
Common stock, par value $ 2.00 $ 2.00
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 10,010,178 10,010,178
Common stock, shares outstanding 10,010,178 10,010,178

Consolidated Statements Of Changes In Stockholders' Equity
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Consolidated Statements Of Changes In Stockholders' Equity (USD $)
In Thousands, except Share data
Common Stock [Member]
Additional Paid In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Comprehensive Income (Loss) [Member]
Total
Balance at Dec. 31, 2010 $ 20,020 $ 21,689 $ (4,175) $ (11)   $ 37,523
Balance, Shares at Dec. 31, 2010 10,010,000          
Net loss     549   549 549
Unrealized loss on available-for-sale securities, net of tax       14 14 14
Balance at Mar. 31, 2011 20,020 21,689 (3,626) 3 563 38,086
Balance, Shares at Mar. 31, 2011 10,010,000          
Balance at Dec. 31, 2011 20,020 21,689 (13,085) 249   28,873
Balance, Shares at Dec. 31, 2011 10,010,000         10,010,178
Net loss     (2,535)   (2,535) (2,535)
Realized gains on available-for-sale securities, net of $24 tax       (48) (48) (48)
Unrealized loss on available-for-sale securities, net of tax       (120) (120) (120)
Balance at Mar. 31, 2012 $ 20,020 $ 21,689 $ (15,620) $ 81 $ (2,703) $ 26,170
Balance, Shares at Mar. 31, 2012 10,010,000         10,010,178

Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical)
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Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Consolidated Statements Of Changes In Stockholders' Equity [Abstract]    
Available for sale securities, tax on realized gains $ 24  
Available for sale securities, deferred tax $ (62) $ 7

Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income (loss) $ (2,535) $ 549
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation 642 580
Provision for loan losses 1,950 1,145
Income (less expenses) on life insurance (114) (87)
Gain on sale of securities available-for-sale (72)  
(Gain) loss on sale of fixed assets (3) 4
(Gain) loss on sale of foreclosed real estate 63 (1)
Adjustment of carrying value of foreclosed real estate 1,410  
Accretion of bond premiums/discounts 104 3
Deferred tax expense 220 1,564
Amortization of core deposit intangible 21 29
Net change in:    
Interest receivable 362 234
Other assets (1,171) (1,903)
Accrued interest payable 77 40
Accrued expenses and other liabilities 219 104
Net Cash Provided by Operating Activities 1,173 2,261
CASH FLOWS FROM INVESTING ACTIVITIES    
Net decrease in loans 18,418 16,916
Purchase of securities available-for-sale (14,554) (2,455)
Proceeds from sale and maturities of securities available-for-sale 3,205 1,061
Payments for the purchase of property and equipment (414) (781)
Proceeds from sales of property and equipment 19 5
Proceeds from sales of other real estate owned 1,957 148
Net Cash Provided by Investing Activities 8,631 14,894
CASH FLOWS FROM FINANCING ACTIVITIES    
Repayment of line of credit borrowings   (4,900)
Net increase in other borrowings   5,200
Repayments to Federal Home Loan Bank (300) (5,300)
Net change in:    
Demand deposits 6,718 11,066
Savings deposits 4,292 7,199
Time deposits (20,240) (1,934)
Net Cash Provided by (Used in) Financing Activities (9,530) 11,331
Net increase in cash and cash equivalents 274 28,486
Cash and Cash Equivalents, Beginning of Period 90,553 82,529
Cash and Cash Equivalents, End of Period 90,827 111,015
Supplemental Disclosure of Cash Paid During the Period for:    
Interest 1,974 2,854
Taxes      
Supplemental Disclosure of Non Cash Transactions:    
Other real estate acquired in settlement of foreclosed loans $ 3,347 $ 1,354

Nature Of Operations
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Nature Of Operations
3 Months Ended
Mar. 31, 2012
Nature Of Operations [Abstract]  
Nature Of Operations

NOTE 1    NATURE OF OPERATIONS:

 

New Peoples Bankshares, Inc. (“The Company”) is a bank holding company whose principal activity is the ownership and management of a community bank.  New Peoples Bank, Inc. (“Bank”) was organized and incorporated under the laws of the Commonwealth of Virginia on December 9, 1997.  The Bank commenced operations on October 28, 1998, after receiving regulatory approval.  As a state chartered member bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions, the Federal Deposit Insurance Corporation and the Federal Reserve Bank.  The Bank provides general banking services to individuals, small and medium size businesses and the professional community of southwestern Virginia, southern West Virginia, and eastern Tennessee.  On June 9, 2003, the Company formed two wholly owned subsidiaries, NPB Financial Services, Inc. and NPB Web Services, Inc.  On July 7, 2004 the Company established NPB Capital Trust I for the purpose of issuing trust preferred securities.  On September 27, 2006, the Company established NPB Capital Trust 2 for the purpose of issuing additional trust preferred securities.  NPB Financial Services, Inc. was a subsidiary of the Company until January 1, 2009 when it became a subsidiary of the Bank. 

Accounting Principles
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Accounting Principles
3 Months Ended
Mar. 31, 2012
Accounting Principles [Abstract]  
Accounting Principles

NOTE 2    ACCOUNTING PRINCIPLES:

 

The financial statements conform to U. S. generally accepted accounting principles and to general industry practices.  In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position at March 31, 2012, and the results of operations for the three month periods ended March 31, 2012 and 2011.  The notes included herein should be read in conjunction with the notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.  The results of operations for the three month periods ended March 31, 2012 and 2011 are not necessarily indicative of the results to be expected for the full year.

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions.

Formal Written Agreement
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Formal Written Agreement
3 Months Ended
Mar. 31, 2012
Formal Written Agreement [Abstract]  
Formal Written Agreement

NOTE 3    FORMAL WRITTEN AGREEMENT:

Effective July 29, 2010, the Company and the Bank entered into a written agreement with the Federal Reserve Bank of Richmond (“Reserve Bank”) and the Virginia State Corporation Commission Bureau of Financial Institutions (the “Bureau”) called (the “Written Agreement”).  At March 31, 2012, we believe we have not yet achieved full compliance with the Written Agreement but we have made progress in our compliance efforts under the Written Agreement and all of the written plans required to date, as discussed in the following paragraphs, have been submitted on a timely basis. 

 

Under the terms of the Written Agreement, the Bank has agreed to develop and submit for approval within specified  time periods written plans to: (a) strengthen board oversight of management and the Bank’s operation; (b) if appropriate after review, to strengthen the Bank’s management and board governance; (c) strengthen credit risk management policies; (d) enhance lending and credit administration; (e) enhance the Bank’s management of commercial real estate concentrations; (f) conduct ongoing review and grading of the Bank’s loan portfolio; (g) improve the Bank’s position with respect to loans, relationships, or other assets in excess of $1 million which are now or in the future become past due more than 90 days, which are on the Bank’s problem loan list, or which are adversely classified in any report of examination of the Bank; (h) review and revise, as appropriate, current policy and maintain sound processes for maintaining an adequate allowance for loan and lease losses; (i) enhance management of the Bank’s liquidity position and funds management practices; (j) revise its contingency funding plan; (k)  revise its strategic plan; and (l)  enhance the Bank’s anti-money laundering and related activities. 

In addition, the Bank has agreed that it will: (a) not extend, renew, or restructure any credit that has been criticized by the Reserve Bank or the Bureau absent prior board of directors approval in accordance with the restrictions in the Written Agreement; (b) eliminate all assets or portions of assets classified as “loss” and thereafter charge off all assets classified as “loss” in a federal or state report of examination, unless otherwise approved by the Reserve Bank.

Under the terms of the Written Agreement, both the Company and the Bank have agreed to submit capital plans to maintain sufficient capital at the Company, on a consolidated basis, and the Bank, on a stand-alone basis, and to refrain from declaring or paying dividends without prior regulatory approval. The Company has agreed that it will not take any other form of payment representing a reduction in the Bank’s capital or make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without prior regulatory approval. The Company may not incur, increase or guarantee any debt without prior regulatory approval and has agreed not to purchase or redeem any shares of its stock without prior regulatory approval.

 

Under the terms of the Written Agreement, the Company and the Bank have appointed a committee to monitor compliance with the Written Agreement. The directors of the Company and the Bank have recognized and unanimously agree with the common goal of financial soundness represented by the Written Agreement and have confirmed the intent of the directors and executive management to diligently seek to comply with all requirements of the Written Agreement.

Capital Requirements
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Capital Requirements
3 Months Ended
Mar. 31, 2012
Capital Requirements [Abstract]  
Capital Requirements

NOTE 4    CAPITAL REQUIREMENTS:

 

The Company and the Bank are subject to various capital requirements administered by federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  Prompt corrective action provisions are not applicable to bank holding companies.

 

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). 

 

As of March 31, 2012, the Company fell below the minimum capital requirements as a result of the Tier 1 leverage ratio decreasing to 3.92%, which was below the minimum requirement of 4.00%.  As of March 31, 2012 the Bank was well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables.  There are no conditions or events since the notification that management believes have changed the Company’s and Bank’s category. 

 

The Company’s and the Bank’s actual capital amounts and ratios are presented in the table as of March 31, 2012 and December 31, 2011, respectively.

 

 

Actual

Minimum Capital Requirement

Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions

(Dollars are in thousands)

Amount

Ratio

 

Amount

Ratio

 

Amount

Ratio

March 31, 2012:

Total Capital to Risk Weighted Assets

The Company

$

43,609

9.08%

38,420

8%

$

N/A

N/A

The Bank

51,056

10.61%

38,507

8%

48,134

10%

Tier 1 Capital Risk Weighted Assets:

The Company

30,119

6.27%

19,210

4%

N/A

N/A

The Bank

44,891

9.33%

19,254

4%

28,880

6%

Tier 1 Capital to Average Assets:

The Company

30,119

3.92%

30,749

4%

N/A

N/A

The Bank

44,891

5.83%

30,790

4%

38,488

5%

 

December 31, 2011:

Total Capital to Risk Weighted Assets

The Company

$

45,856

9.15%

40,104

8%

$

N/A

N/A

The Bank

53,070

10.56%

40,189

8%

50,236

10%

Tier 1 Capital Risk Weighted Assets:

The Company

32,941

6.57%

20,052

4%

N/A

N/A

The Bank

46,641

9.28%

20,095

4%

30,142

6%

Tier 1 Capital to Average Assets:

The Company

33,461

4.23%

31,658

4%

N/A

N/A

The Bank

46,641

5.99%

31,160

4%

38,950

5%


Investment Securities
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Investment Securities
3 Months Ended
Mar. 31, 2012
Investment Securities [Abstract]  
Investment Securities

NOTE 5    INVESTMENT SECURITIES:

 

The amortized cost and estimated fair value of securities (all available-for-sale) are as follows:

 

 

Gross

 

Gross

 

Approximate

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

(Dollars are in thousands)

Cost

 

Gains

 

Losses

 

Value

March 31, 2012

U.S. Government Agencies

$

25,763

$

108

$

37

$

25,834

Taxable municipals

1,749

77

48

1,778

Tax-exempt municipals

0

0

0

0

Mortgage backed securities

15,862

72

49

15,885

Total Securities AFS

$

43,374

$

257

$

134

$

43,497

 

December 31, 2011

U.S. Government Agencies

$

21,405

$

238

$

10

$

21,633

Taxable municipals

1,465

89

2

1,552

Tax-exempt municipals

1,043

11

-

1,054

Mortgage backed securities

8,144

67

16

8,195

Total Securities AFS

$

32,057

$

405

$

28

$

32,434

 

The following table details unrealized losses and related fair values in the available-for-sale portfolio.  This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2012 and December 31, 2011.

 

 

 

Less than 12 Months

 

12 Months or More

 

Total

 

 

(Dollars are in thousands)

 

Fair Value

 

Unrealized

Losses

 

Fair

Value

 

Unrealized

Losses

 

Fair

Value

 

Unrealized

Losses

 

March 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Agencies

$

8,161

$

37

$

-

$

-

$

8,161

$

37

 

Taxable municipals

 

810

 

48

 

-

 

-

 

810

 

48

 

Mtg. backed securities

 

8,637

 

49

 

-

 

-

 

8,637

 

49

 

Total Securities AFS

$

17,608

$

134

$

-

$

-

$

17,608

$

134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Agencies

$

5,592

$

10

$

-

$

-

$

5,592

$

10

 

Taxable municipals

 

572

 

2

 

-

 

-

 

572

 

2

 

Mtg. backed securities

 

4,055

 

16

 

-

 

-

 

4,055

 

16

 

Total Securities AFS

$

10,219

$

28

$

-

$

-

$

10,219

$

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At March 31, 2012, the available-for-sale portfolio included twenty investments for which the fair market value was less than amortized cost.  At December 31, 2011, the available-for-sale portfolio included eleven investments for which the fair market value was less than amortized cost.  Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial conditions and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  No securities had an other than temporary impairment.

 

The amortized cost and fair value of investment securities at March 31, 2012, 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 penalties.

 

Weighted

(Dollars are in thousands)

Amortized

 

Fair

 

Average

Securities Available for Sale

Cost