Attached files
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| 8-K - NEW PEOPLES BANKSHARES INC | npbs0811168k.htm |
Exhibit 99.1
NEWS RELEASE
| FOR IMMEDIATE RELEASE: | FOR MORE INFORMATION, CONTACT: |
| August 11, 2016 | C. Todd Asbury |
| (276) 873-7000 |
NEW PEOPLES BANKSHARES ANNOUNCES SECOND QUARTER 2016 RESULTS
Honaker, Virginia -- New Peoples Bankshares (the “Company”) (OTCBB: NWPP) and its wholly-owned subsidiary New Peoples Bank (the “Bank”) today announced second quarter net income of $882,000, or $0.04 per share, for the quarter ended June 30, 2016. This compares to net income of $462,000, or $0.02 per share, for the same period ended June 30, 2015, which is an improvement of $420,000, or 90.9%. For the six months ended June 30, 2016, the Company reported net income of $1.58 million, or $0.07 per share. This compares to net income of $1.08 million, or $0.05 per share, for the same period ended June 30, 2015, which is an improvement of $496,000, or 45.8%.
Operationally, during the first half of 2016, the Bank successfully installed state-of-the-art Interactive Teller Machines (“ITMs”) in all branch locations, allowing the Bank to provide its customers with teller services from 7am to 7pm Monday through Saturday. Additionally, in July 2016 the Bank and its wholly-owned subsidiary NPB Insurance Services, Inc. announced it is teaming up with The Hilb Group of Virginia dba CSE Insurance Services, a division of the Hilb Group, LLC (“CSE”), located in Abingdon, Virginia, to provide insurance services for its current and future customers. Effective July 1, 2016, current NPB Insurance Services, Inc. customers will be serviced by CSE and the Bank will refer future insurance needs of its bank customers to CSE.
Earnings Highlights
| · | For the quarter ended June 30, 2016: |
| · | Strong net interest margin of 3.94% for the quarter; |
| · | Net interest income declined slightly by $199,000, or 3.6%, when compared to the quarter ended June 30, 2015; |
| · | A negative provision for loans losses of $500,000 was recorded in the 2nd quarter of 2016; |
| · | Gains on the sales of investment securities were $135,000 for the quarter as compared to no gains for the same period in 2015; |
| · | Noninterest income increased by $212,000, or 13.8%, when compared to the quarter ended June 30, 2015; |
| · | Salaries and employee benefits expense rose 15.9%, or $457,000, when compared to the same quarter of 2015. This increase was mainly due to adding several commercial lending officers as well as staff to operate the ITMs; |
| · | Occupancy and equipment expense increased by $148,000, or 16.1%, when compared to the same period of 2015. This increase was mainly due to the installation of the ITMs; and |
| · | Expenses associated with other real estate owned declined $618,000, or 87.4% when compared to the quarter ended June 30, 2015. |
| · | Year-to-date June 30, 2016: |
| · | The net interest margin was 3.95%; |
| · | Net interest income declined slightly by $158,000, or 1.4%, when compared to the first six months of 2015; |
| · | A negative provision for loans losses of $500,000 was recorded in the first half of 2016; |
| · | Gains on the sales of investment securities were $240,000 for the first half of 2016; |
| · | Salaries and employee benefits expense rose 12.5%, or $725,000, when compared to the same period of 2015. This increase was mainly due to adding several commercial lending officers as well as staff to operate the ITMs; |
| · | Data processing and telecommunications expense rose $155,000, or 15.5% when compared to the same period in 2015; |
| · | FDIC insurance premiums expense fell $169,000, or 38.5%, from $439,000 during the first half of 2015, to $270,000 for the same period in 2016; |
| · | Expenses associated with other real estate owned declined $814,000, or 76.4%, when compared to the six-months ended June 30, 2015; and |
| · | Total noninterest expenses climbed $204,000, or 1.6%, to $13.1 million for the first half of 2016 from the $12.9 million recorded in the same period in 2015. |
Balance Sheet:
| · | Total loans increased $9.3 million during the quarter, to $459.6 million at June 30, 2016. Year to date, loans have increased $18.4 million, or 4.2%; |
| · | Securities available for sale decreased $8.1 million during the quarter from $84.7 million at March 31, 2016 to $76.6 million at June 30, 2016. Year to date, securities available for sale decreased $25.0 million, or 24.6%; |
| · | Bank premise and equipment has increased $3.1 million, or 10.9%, year to date primarily due to the installation of the ITMs; |
| · | Time deposits declined $5.4 million, or 2.1%, during the first six months of 2016; |
| · | Total deposits showed a slight decline of $132,000 during the quarter, totaling $555.1 million at June 30, 2016. Year to date, total deposits declined $2.9 million or 0.5%; |
| · | Federal Home Loan Bank advances declined $3.3 million during the second quarter to $9.4 million. Year to date, Federal Home Loan Bank advances have increased $6.4 million; |
| · | Total capital at June 30, 2016 was $48.5 million; |
| · | Book value per share of $2.08 as of June 30, 2016; and |
| · | The Bank was ‘well capitalized’ as defined by regulatory guidance. |
Asset Quality:
| · | Nonperforming assets, which includes nonaccrual loans and other real estate owned, declined $590,000, or 2.2% during the first half of 2016. Nonperforming assets declined $5.7 million, or 17.6%, when compared to June 30, 2015; |
| · | Nonperforming assets as a percentage of total assets was 4.2% at quarter end; |
| · | Loans past due 30 days or more totaled $15.6 million, or 3.4% of total loans outstanding; |
| · | Annualized net charge offs as a percentage of average loans and average assets for the first half of 2016 was 0.15% and 0.11%, respectively; and |
| · | The allowance for loan losses as a percentage to total loans was 1.45% at June 30, 2016. |
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.
This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company's Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
NEW PEOPLES BANKSHARES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2016 AND DECEMBER 31, 2015
(IN THOUSANDS EXCEPT SHARE DATA)
| ASSETS | June 30, 2016 | December 31, 2015 | ||||||
| UNAUDITED | AUDITED | |||||||
| Cash and due from banks | $ | 18,412 | $ | 15,087 | ||||
| Interest-bearing deposits with banks | 13,821 | 11,251 | ||||||
| Total Cash and Cash Equivalents | 32,233 | 26,338 | ||||||
| Investment securities available-for-sale | 76,626 | 101,642 | ||||||
| Loans receivable | 459,613 | 441,169 | ||||||
| Allowance for loan losses | (6,649 | ) | (7,493 | ) | ||||
| Net Loans | 452,964 | 433,676 | ||||||
| Bank premises and equipment, net | 31,228 | 28,148 | ||||||
| Equity securities (restricted) | 2,613 | 2,441 | ||||||
| Other real estate owned | 14,134 | 12,398 | ||||||
| Accrued interest receivable | 1,886 | 1,816 | ||||||
| Life insurance investments | 12,168 | 12,105 | ||||||
| Deferred taxes, net | 4,770 | 5,121 | ||||||
| Other assets | 3,689 | 2,213 | ||||||
| Total Assets | $ | 632,311 | $ | 625,898 | ||||
| LIABILITIES | ||||||||
| Deposits | ||||||||
| Demand deposits | ||||||||
| Noninterest bearing | $ | 148,729 | $ | 149,714 | ||||
| Interest-bearing | 42,720 | 30,251 | ||||||
| Savings deposits | 112,037 | 121,076 | ||||||
| Time deposits | 251,598 | 256,978 | ||||||
| Total Deposits | 555,084 | 558,019 | ||||||
| FHLB advances | 9,358 | 2,958 | ||||||
| Accrued interest payable | 292 | 288 | ||||||
| Accrued expenses and other liabilities | 2,596 | 2,050 | ||||||
| Trust preferred securities | 16,496 | 16,496 | ||||||
| Total Liabilities | 583,826 | 579,811 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock - $2.00 par value; 50,000,000 shares authorized; | ||||||||
| 23,354,082 shares issued and outstanding at | ||||||||
| June 30, 2016 and December 31, 2015 | 46,708 | 46,708 | ||||||
| Common stock warrants | 764 | 764 | ||||||
| Additional paid-in capital | 13,965 | 13,965 | ||||||
| Retained deficit | (13,443 | ) | (15,023 | ) | ||||
| Accumulated other comprehensive income (loss) | 491 | (327 | ) | |||||
| Total Stockholders’ Equity | 48,485 | 46,087 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 632,311 | $ | 625,898 |
| NEW PEOPLES BANKSHARES, INC. | |||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||
| FOR THE THREE MONTHS ENDED JUNE 30, 2016 AND 2015 | |||||
| (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) | |||||
| (UNAUDITED) | |||||
| INTEREST AND DIVIDEND INCOME | 2016 | 2015 | ||||||
| Loans including fees | $ | 5,613 | $ | 5,925 | ||||
| Federal funds sold | — | 1 | ||||||
| Interest-earning deposits with banks | 23 | 29 | ||||||
| Investments | 363 | 423 | ||||||
| Dividends on equity securities (restricted) | 32 | 34 | ||||||
| Total Interest and Dividend Income | 6,031 | 6,412 | ||||||
| INTEREST EXPENSE | ||||||||
| Deposits | ||||||||
| Demand | 13 | 9 | ||||||
| Savings | 37 | 44 | ||||||
| Time deposits below $100,000 | 270 | 360 | ||||||
| Time deposits above $100,000 | 158 | 251 | ||||||
| FHLB Advances | 28 | 38 | ||||||
| Federal funds purchased | — | — | ||||||
| Trust Preferred Securities | 123 | 109 | ||||||
| Total Interest Expense | 629 | 811 | ||||||
| NET INTEREST INCOME | 5,402 | 5,601 | ||||||
| PROVISION FOR LOAN LOSSES | (500) | — | ||||||
| NET INTEREST INCOME AFTER | ||||||||
| PROVISION FOR LOAN LOSSES | 5,902 | 5,601 | ||||||
| NONINTEREST INCOME | ||||||||
| Service charges | 584 | 552 | ||||||
| Fees, commissions and other income | 858 | 823 | ||||||
| Insurance and investment fees | 143 | 132 | ||||||
| Net realized gains on sale of investment securities | 135 | — | ||||||
| Life insurance investment income | 33 | 34 | ||||||
| Total Noninterest Income | 1,753 | 1,541 | ||||||
| NONINTEREST EXPENSES | ||||||||
| Salaries and employee benefits | 3,339 | 2,882 | ||||||
| Occupancy and equipment expense | 1,068 | 920 | ||||||
| Advertising and public relations | 129 | 72 | ||||||
| Data processing and telecommunications | 576 | 503 | ||||||
| FDIC insurance premiums | 136 | 221 | ||||||
| Other real estate owned and repossessed vehicles, net | 89 | 707 | ||||||
| Other operating expenses | 1,439 | 1,375 | ||||||
| Total Noninterest Expenses | 6,776 | 6,680 | ||||||
| INCOME BEFORE INCOME TAXES | 879 | 462 | ||||||
| INCOME TAX EXPENSE (BENEFIT) | (3) | — | ||||||
| NET INCOME | $ | 882 | $ | 462 | ||||
| Income Per Share | ||||||||
| Basic | $ | 0.04 | $ | 0.02 | ||||
| Fully Diluted | $ | 0.04 | $ | 0.02 | ||||
| Weighted Average Shares of Common Stock | ||||||||
| Basic | 23,354,082 | 22,878,654 | ||||||
| Fully Diluted | 23,354,082 | 22,878,654 |
NEW PEOPLES BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
| INTEREST AND DIVIDEND INCOME | 2016 | 2015 | ||||||
| Loans including fees | $ | 11,178 | $ | 11,706 | ||||
| Federal funds sold | — | 2 | ||||||
| Interest-earning deposits with banks | 44 | 55 | ||||||
| Investments | 827 | 849 | ||||||
| Dividends on equity securities (restricted) | 64 | 66 | ||||||
| Total Interest and Dividend Income | 12,113 | 12,678 | ||||||
| INTEREST EXPENSE | ||||||||
| Deposits | ||||||||
| Demand | 24 | 18 | ||||||
| Savings | 78 | 85 | ||||||
| Time deposits below $100,000 | 535 | 747 | ||||||
| Time deposits above $100,000 | 312 | 522 | ||||||
| FHLB advances | 64 | 78 | ||||||
| Federal funds purchased | 2 | — | ||||||
| Trust preferred securities | 245 | 217 | ||||||
| Total Interest Expense | 1,260 | 1,667 | ||||||
| NET INTEREST INCOME | 10,853 | 11,011 | ||||||
| PROVISION FOR LOAN LOSSES | (500 | ) | — | |||||
| NET INTEREST INCOME AFTER | ||||||||
| PROVISION FOR LOAN LOSSES | 11,353 | 11,011 | ||||||
| NONINTEREST INCOME | ||||||||
| Service charges | 1,072 | 1,088 | ||||||
| Fees, commissions and other income | 1,663 | 1,537 | ||||||
| Insurance and investment fees | 301 | 256 | ||||||
| Net realized gains on sale of investment securities | 240 | 35 | ||||||
| Life insurance investment income | 63 | 69 | ||||||
| Total Noninterest Income | 3,339 | 2,985 | ||||||
| NONINTEREST EXPENSES | ||||||||
| Salaries and employee benefits | 6,549 | 5,824 | ||||||
| Occupancy and equipment expense | 1,921 | 1,862 | ||||||
| Advertising and public relations | 233 | 129 | ||||||
| Data processing and telecommunications | 1,157 | 1,002 | ||||||
| FDIC insurance premiums | 270 | 439 | ||||||
| Other real estate owned and repossessed vehicles, net | 252 | 1,066 | ||||||
| Other operating expenses | 2,731 | 2,587 | ||||||
| Total Noninterest Expenses | 13,113 | 12,909 | ||||||
| INCOME BEFORE INCOME TAXES | 1,579 | 1,087 | ||||||
| INCOME TAX EXPENSE (BENEFIT) | (1 | ) | 3 | |||||
| NET INCOME | $ | 1,580 | $ | 1,084 | ||||
| Income Per Share | ||||||||
| Basic | $ | 0.07 | $ | 0.05 | ||||
| Fully Diluted | $ | 0.07 | $ | 0.05 | ||||
| Average Weighted Shares of Common Stock | ||||||||
| Basic | 23,354,082 | 22,878,654 | ||||||
| Fully Diluted | 23,354,082 | 22,878,654 |
NEW PEOPLES BANKSHARES, INC.
KEY PERFORMANCE AND CAPITAL RATIOS
(UNAUDITED)
| For the three-months ended, | ||||||||||||||||||||
| June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||||
| Key Performance Ratios | ||||||||||||||||||||
| Earning Asset Yield | 4.39 | % | 4.41 | % | 4.70 | % | 4.50 | % | 4.42 | % | ||||||||||
| Cost of interest bearing liabilities | 0.59 | % | 0.58 | % | 0.60 | % | 0.65 | % | 0.71 | % | ||||||||||
| Cost of Funds | 0.43 | % | 0.44 | % | 0.45 | % | 0.49 | % | 0.53 | % | ||||||||||
| Net Interest Margin | 3.94 | % | 3.95 | % | 4.23 | % | 3.99 | % | 3.86 | % | ||||||||||
| Return on average stockholder’s equity | 7.49 | % | 5.99 | % | (6.02 | )% | 20.52 | % | 4.19 | % | ||||||||||
| Return on average assets | 0.56 | % | 0.45 | % | (0.45 | )% | 1.43 | % | 0.28 | % | ||||||||||
| Efficiency Ratio* | 94.70 | % | 90.05 | % | 122.39 | % | 84.95 | % | 93.53 | % | ||||||||||
| Loan to Deposit Ratio | 82.80 | % | 81.10 | % | 79.06 | % | 77.67 | % | 76.96 | % | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Allowance for loan loss to total loans | 1.45 | % | 1.60 | % | 1.70 | % | 1.98 | % | 1.97 | % | ||||||||||
| Net Charge Offs to average loans, annualized | 0.06 | % | 0.25 | % | 0.16 | % | (1.03 | )% | 0.20 | % | ||||||||||
| Nonaccrual loans to total loans | 2.72 | % | 3.00 | % | 3.37 | % | 4.08 | % | 3.83 | % | ||||||||||
| Nonperforming assets to total assets | 4.22 | % | 4.20 | % | 4.35 | % | 5.22 | % | 5.03 | % | ||||||||||
| Capital Ratios (Bank Only)** | ||||||||||||||||||||
| Tier 1 leverage | 9.98 | % | 9.83 | % | 9.67 | % | 9.66 | % | 9.01 | % | ||||||||||
| Tier 1 risk-based capital | 15.70 | % | 16.02 | % | 16.29 | % | 16.44 | % | 15.52 | % | ||||||||||
| Total risk-based capital | 16.95 | % | 17.28 | % | 17.55 | % | 17.71 | % | 16.79 | % | ||||||||||
| Total common equity tier 1 capital | 15.70 | % | 16.02 | % | 16.29 | % | 16.44 | % | 15.52 | % | ||||||||||
*The efficiency ratio is computed as a percentage of non-interest expense divided by the sum of net interest income and non-interest income. This is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information should not be viewed as a substitute for GAAP. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate them differently.
**The Bank’s capital ratios as of December 31, 2015 and 2014 are audited.