Honaker, Virginia ‐‐ New Peoples Bankshares (the “Company”) (OTCBB: NWPP) and its wholly‐owned subsidiary New Peoples Bank (the “Bank”) today announced consolidated net income of $3.1 million, or $0.13 earnings per share, for the year ended December 31, 2017. This compares to consolidated net income of $958 thousand, or $0.04 earnings per share, for the year ended December 31, 2016, which is an increase of $2.1 million, or $0.09 earnings per share.
“During 2017 we made great strides in growing the loan portfolio, improving credit quality, reducing nonperforming assets, growing deposits, increasing earnings and capital” stated C. Todd Asbury, President and Chief Executive Officer. He added “We had loan growth of $44.4 million during the year and were able to reduce other real estate owned by $3.8 million as well. We recognized a gain of $2.6 million on the sale and leaseback transactions, as we were able to tap into the equity we had built in our branch properties. The additional capital increased our capacity to continue to grow the balance sheet, namely loans, and also allowed us to be more aggressive in reducing our nonperforming assets to be more in line with our peers. Net earnings increased as a result of the improvements that we have made over the past years. We believe these improvements will continue to benefit net earnings going forward. Furthermore, we are appreciative of our shareholders who exercised stock warrants in late 2017 demonstrating their confidence in the Company’s continued improvements.” Asbury also added, “I am very proud of our team of board members’ and employees’ hard work to accomplish a lot of great things in 2017. It was a remarkable year.”
Consolidated net income for the year ended December 31, 2017 was $3.1 million, or $0.13 per share, compared to consolidated net income of $958 thousand, or $0.04 per share, for the year ended December 31, 2016. This is an increase of $2.1 million, or $0.09 per share. The annualized return on average assets for 2017 was 0.47% as compared to 0.15% for the same period in 2016. The return on average equity was 6.30% for 2017 and 2.00% for the same period in 2016.
Net interest income, increased $1.1 million, or 4.85%, from 2016 to 2017. This increase in net interest income is due primarily to the $1.5 million increase in interest and fees on loans, due to increased loan volume during 2017.
For 2017, noninterest income increased to $9.8 million from $7.3 million for the same period in 2016, an increase of $2.5 million, or 34.91%. This increase was primarily due to the $2.6 million gain recognized on the sale and leaseback transactions completed during the second quarter of 2017. Additionally, 2016 includes gains on sales of investment securities that were not replicated in 2017.
Noninterest expenses showed a slight increase of $360,000 to $28.9 million in 2017. Salaries and employee benefits increased from $13.1 million in 2016 to $13.5 million in 2017, an increase of $389 thousand, or 2.96%. This increase was primarily due to annual pay increases and strategic hires made throughout the year. Occupancy and equipment expenses increased $326 thousand to $4.5 million during 2017 primarily as a result of lease expenses resulting from the sale lease back transaction. Expenses related to other real estate owned and repossessed assets showed a decline of $749 thousand, or 34.15%, from $2.2 million in 2016 to $1.4 million in 2017.
With the enactment of the Tax Cuts and Jobs Act, the federal corporate tax rate was reduced from a graduated rate of up to 35% to a flat rate of 21% effective January 1, 2018. As changes in tax rates are enacted, deferred tax assets and liabilities are revalued with an adjustment through tax expense. During the fourth quarter of 2017, the value of deferred tax assets was reduced resulting in an additional income tax provision of $4.0 million. This additional tax provision was offset by the reversal of a previously recorded valuation allowance, against our deferred tax asset, totaling $4.2 million. In addition to the deferred tax adjustments recorded, a tax penalty of $318 thousand was recorded resulting from the surrender of several low yielding bank owned life insurance policies. Combined all of the income tax related items resulted in a net $144 thousand expense for 2017 as compared to a $9 thousand benefit in 2016.
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Contact information for New Peoples Bankshares, Inc.
C. Todd Asbury, President and CEO
New Peoples Bankshares, Inc. is a one‐bank holding company headquartered in Honaker, Virginia. Its whollyowned 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.
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