New Peoples Bankshares Reports 2015 Results (3/04/16)
Honaker, Virginia -- New Peoples Bankshares (the “Company”) (OTCPINK: NWPP) and its wholly-owned subsidiary New Peoples Bank (the “Bank”) today announced consolidated net income of $2.7 million, or $0.12 earnings per share, for the year ended December 31, 2015. This compares to consolidated net income of $240,000, or $0.01 earnings per share, for the year ended December 31, 2014 which is an improvement of $2.4 million, or $0.11 earnings per share.
Highlights from the year ended December 31, 2015 include:
• A negative provision for loan losses of $2.2 million;
• A cumulative writedown of other real estate owned properties of $3.2 million, an increase of $2.1 million, or 195.36% when compared to 2014;
• A reduction of $1.0 million, or 24.70%, in interest expenses when compared to 2014;
• Salaries and employee benefits decreased from $12.7 million in 2014 to $11.8 million in 2015, a decrease of $902,000, or 7.09%;
• Received regulatory approval to make all required interest payments on trust preferred securities;
• A decrease of $7.1 million, or 32.08% in nonaccrual loans during 2015;
• Net charge offs of $229,000 for 2015, which is an improvement of $2.9 million, or 92.75%,versus net charge offs of $3.2 million in 2014;
• A decrease of $7.8 million, or 28.41%, in substandard loans during 2015;
• A decrease of $2.6 million, or 17.62%, in other real estate owned during 2015;
• A decrease of $43.0 million, or 14.33%, in higher-costing time deposits during 2015;
• A strong net interest margin of 3.93% for 2015, which is an increase of 22 basis points over the 3.71% net interest margin for 2014;
• An improvement in all regulatory capital ratios which exceeds “well capitalized” as defined by regulatory guidelines; and,
• Tangible book value per share of $1.97 as of December 31, 2015.
“On February 2nd of 2016, we announced the termination of the formal written agreement the Company and Bank were under for over 5 years” stated Todd Asbury, President and Chief Executive Officer. He added “The tremendous progress made during 2015 in our financial results, capital position and credit quality that led to the termination of the formal written agreement was the result of the foundation laid in previous years. This foundation, which includes enhanced board and management oversight and risk-management practices, as well as stricter credit underwriting, will be the springboard for future balance sheet growth as we intend to prudently and conservatively increase loans and deposits. We believe we are well-positioned to achieve our growth goals and are extremely excited about the next phase of our Company.”
2015 Year-to-Date Results
The Company‘s consolidated net income for the year ended December 31, 2015 was $2.7 million, or earnings per share of $0.12, compared to consolidated net income of $240,000, or earnings per share of $0.01, for the year ended December 31, 2014. This is an improvement of $2.4 million, or $0.11 earnings per share. The improvement was mainly driven by maintaining a strong net interest margin of 3.93%, cost savings strategies initiated in prior periods but realized in the current period, and a negative provision for loan losses of $2.2 million. The annualized return on average assets for the fiscal year 2015 was 0.41% as compared to 0.04% for the same period in 2014. The annualized return on average equity was 5.95% for the fiscal year 2015 and 0.59% for the same period in 2014.
The Company’s primary source of income, net interest income, slightly increased by $13,000, or 0.06%, from 2014 to 2015. The increase in net interest income is due primarily to the $1.0 million savings in interest expense during 2015 mainly driven by the $43.0 million reduction in time deposits. The savings in interest expense offset the $989,000 decrease in interest income, which was due to a reduction in average loans during 2015 and decreased interest income from new and renewed loans recorded at lower interest rates, and an elevated level of nonaccrual loans. Loan interest income decreased $1.2 million, or 4.84%, from $24.9 million in 2014 to $23.7 million in 2015.
For 2015, noninterest income increased to $6.4 million from $6.2 million for the same period in 2014. This is an increase of $162,000, or 2.60%. This increase was primarily due to the $217,000 in life insurance earnings we received in August 2015 as the result of the death benefits we received on a bank-owned life insurance policy.
Noninterest expenses decreased $71,000, or 0.25%, to $28.5 million in 2015 from $28.6 million in 2014. Salaries and employee benefits decreased from $12.7 million in 2014 to $11.8 million in 2015, a decrease of $902,000, or 7.09%. This decrease was mainly due to management’s decision to close four lower-performing branches in October 2014 which resulted in staff reductions and salary and employee benefit savings in 2015. Occupancy and equipment expenses remained constant at $3.9 million in 2015 and 2014. Advertising expense decreased $56,000 from 2014 to 2015. Data processing and telecommunication expenses decreased $95,000 from 2014 to 2015. In 2015, FDIC assessment expense decreased $585,000, or 41.0%, from $1.4 million in 2014 to $842,000 in 2015. Expenses related to other real estate owned and repossessed assets increased $1.8 million, or 78.8%, from $2.3 million in 2014 to $4.1 million in 2015. During 2015 we recorded writedowns on other real estate owned properties in the amount of $3.2 million compared to $1.2 million in 2014. OREO decreased in 2015 to $12.4 million at December 31, 2015 from $15.0 million at December 31, 2014.
Balance Sheet
At December 31, 2015, total assets were $625.9 million, total loans were $441.2 million, and total deposits were $558.0 million. Total assets decreased $25.2 million in 2015, or 3.87%, from $651.1 million at December 31, 2014. During the 2014 and early 2015, we strategically decreased total assets and total loans to improve our capital position. However, going forward, we anticipate total assets increasing due to our plan to conservatively and prudently grow the loan portfolio, namely commercial loans. In August 2015, we hired an experienced commercial loan officer as our First Senior Vice President and Senior Commercial Banking Officer of the Bank. Subsequently, we have hired two additional commercial loan officers and a business development officer to assist in growing the loan portfolio.
On the liability side of the balance sheet, during 2015, as funding needs declined, total deposits declined $27.2 million, or 4.64% to $558.0 million. However, lower-costing non-time deposits increased $15.8 million, or 5.55%, while time deposits declined $43.0 million, or 14.33%. FHLB advances declined $1.2 million to $2.96 million while trust preferred securities remained unchanged at $16.5 million.
Total equity was $46.1 million at December 31, 2015. The Bank improved its capital position and maintained a well-capitalized status during both 2015 and 2014. The Bank’s capital ratios at December 31, 2015 as compared to December 31, 2014, respectively were as follows: Tier 1 leverage ratio of 9.67% versus 8.19%; Tier 1 risk based capital ratio of 16.29% versus 14.46%; and total risk based capital ratio of 17.55% versus 15.73%. The Company and Bank are considered well-capitalized under regulatory guidelines.
Asset Quality and Allowance for Loan Losses
Asset quality continued its trend of improvement during 2015. We have experienced a decrease in loan delinquencies and nonaccrual loans in 2015. Total past due loans were $13.4 million as of December 31, 2015, a decrease of $6.1 million, or 31.20%, from the $19.5 million as of December 31, 2014. At December 31, 2015, there were 161 loans in non-accrual status totaling $14.8 million, or 3.37% of total loans. At December 31, 2014, there were 165 loans in non-accrual status totaling $21.9 million, or 4.78% of total loans. There were no loans past due 90 days or greater and still accruing interest at December 31, 2015 or 2014.
Nonperforming assets, which include nonaccrual loans, loans past due 90 days or greater still accruing interest, and other real estate owned, decreased $9.7 million, or 26.18%, from $36.9 million to $27.2 million during 2015. Total nonperforming assets represented 4.35% and 5.67% of total assets at December 31, 2015 and December 31, 2014, respectively. Nonaccrual loans have declined $7.1 million, or 32.08%, to $14.8 million and other real estate owned declined $2.6 million or 17.62%, to $12.4 million during 2015.
The allowance for loan losses decreased to $7.5 million at December 31, 2015 as compared to $9.9 million at December 31, 2014. The allowance for loan losses at the end of 2015 was approximately 1.70% of total loans as compared to 2.17% at the end of 2014. No provision for loan losses was recorded during 2014, while negative provisions of $2.2 million were recorded in 2015. Net loans charged off decreased in 2015 as they were $229,000, or 0.05% of average loans, compared to $3.2 million, or 0.67% of average loans, in 2014.
About New Peoples Bankshares, Inc.
New Peoples Bankshares, Inc. is a one-bank holding company headquartered in Honaker, Virginia. Its wholly-owned subsidiary provides banking products and services through its 19 locations throughout southwest Virginia, Eastern Tennessee, and southern West Virginia. The Company’s common stock is traded over the counter under the trading symbol “NWPP”. Additional investor information can be found on the Company’s website at www.npbankshares.com.
[tables deleted]
http://www.sec.gov/Archives/edgar/data/1163389/000072174816001021/nwpp8k030416ex99_1.htm
News 
Market Data 
Discover 
