NEW PEOPLES BANKSHARES INC Annual Report - How They Did This Year

I’ve put together this guide to help you understand how New Peoples Bankshares Inc. (NWPP) performed this year. My goal is to cut through the corporate jargon so you can decide if this company fits your investment goals.

1. What does this company do?

New Peoples Bankshares is a community-focused bank based in Honaker, Virginia. They operate through their subsidiary, New Peoples Bank, Inc. They function as a traditional bank that takes in deposits and lends that money to local businesses, farmers, and homeowners.

They serve the "Tri-State" area (Virginia, West Virginia, Tennessee, and North Carolina) through 21 branches. By the end of 2025, the bank managed about $1.1 billion in assets. They offer a full range of services, including real estate loans, consumer loans, investment planning, and insurance.

2. Financial Performance: How did they do?

The bank had a strong 2025. They earned $10.1 million in profit, a 23.2% increase over the $8.2 million earned in 2024.

• Growth Drivers: The bank grew its loan portfolio by $41 million, reaching a total of $825 million. They also improved their profit margin on loans to 3.85%, up from 3.62% last year. This margin represents the profit kept after paying interest to depositors.
• Operational Strength: After removing $200,000 in one-time technology upgrade costs, their adjusted profit rose from $7.4 million in 2024 to $10.3 million in 2025. This 39% growth highlights strong core operations. Their credit quality remains high, with bad loans making up only 0.45% of their total assets.

3. Dividends and Stock

If you are looking for income, the bank paid a cash dividend of $0.08 per share in 2025. This used about 18% of their profit, leaving significant cash to reinvest in the business. They have already declared a $0.09 dividend for early 2026, signaling management's confidence in their cash flow.

The company also bought back 50,000 shares at an average price of $14.50. Please note that the stock trades on the "Pink Open Market" (OTC). This means trading volume is limited, and it may be more difficult to buy or sell shares quickly compared to stocks listed on major national exchanges.

4. Key Risks

• Regulatory Environment: As a bank, they must adhere to strict capital requirements. Maintaining these standards is essential to avoid penalties and ensure operational stability.
• Technology Integration: The bank invested $1.5 million in a new banking system in 2025. While this supports growth, large-scale system transitions inherently carry risks related to service continuity and data security.
• Interest Rate Sensitivity: With 65% of their loans carrying variable rates, changes in Federal Reserve policy could impact profit margins if the cost of deposits increases faster than the income generated from loans.
• Market Competition: New Peoples competes with larger banks and digital lenders. While they differentiate themselves through personal service, they face pressure to remain competitive regarding interest rates offered to depositors.

5. Future Outlook

The bank is focused on a steady, conservative strategy. Management aims to grow their commercial loan portfolio by 5% in 2026, prioritizing organic growth and a stable balance sheet over rapid, risky acquisitions.

Note: This guide is based on the 2025 annual report. Past performance does not guarantee future results. Before investing, consider whether the limited liquidity of OTC stocks aligns with your personal portfolio strategy.