ThZeal - The Zeal

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission file number: 000-33411

NEW PEOPLES BANKSHARES, INC.

(Exact name of registrant as specified in its charter)


Virginia (State or other jurisdiction of incorporation or organization)			31-1804543 (I.R.S. Employer Identification No.)
67 Commerce Drive, Honaker, Virginia (Address of principal executive offices)			24260 (Zip Code)

(276) 873-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

[X]

[ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ((§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

[X]

[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [X]		Smaller reporting company [X]
		Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes	[ ]		No	[X]

The number of shares outstanding of the registrant’s common stock was 23,598,399 as of August 07, 2025.

NEW PEOPLES BANKSHARES, INC.

INDEX

		Page
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets - June 30, 2025 (Unaudited) and December 31, 202	3

	Consolidated Statements of Income – Three and six months ended June 30, 2025 and 2024 (Unaudited)	4

	Consolidated Statements of Comprehensive Income – Three and six months ended June 30, 2025 and 2024 (Unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity – Three and six months ended June , 2025 and 2024 (Unaudited)	6

	Consolidated Statements of Cash Flows – Three months and six ended June 300, 2025 and 2024 (Unaudited)	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4.	Controls and Procedures	32

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults upon Senior Securities	33

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	34

Item 6.	Exhibits	34

SIGNATURES		35

Part I Financial Information

Item 1

Financial Statements

NEW PEOPLES BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2025 AND DECEMBER 31, 2024

(IN THOUSANDS EXCEPT PER SHARE AND SHARE DATA)

(UNAUDITED)


	June 30,			December 31,
	2025			2024
ASSETS
Cash and due from banks		18,838		$	13,218
Interest-bearing deposits with banks		53,195			54,300
Federal funds sold		126			150
Total cash and cash equivalents		72,159			67,668
Investment securities available-for-sale, at fair value		96,749			95,984
Loans receivable		695,815			657,536
Allowance for credit losses		(7,948	)		(7,684	)
Net loans		687,867			649,852
Bank premises and equipment, net		16,896			17,070
Other real estate owned		57			87
Accrued interest receivable		3,581			3,458
Deferred taxes, net		4,368			4,809
Insurance benefit receivable		—			5,417
Right-of-use assets – operating leases		3,234			3,413
Other assets		8,019			7,167
Total assets		892,930		$	854,925
LIABILITIES
Deposits:
Noninterest bearing		233,567		$	224,938
Interest-bearing		548,342			525,044
Total deposits		781,909			749,982
Borrowed funds		26,986			24,986
Lease liabilities – operating leases		3,234			3,413
Accrued interest payable		1,427			1,442
Accrued expenses and other liabilities		4,530			4,361
Total liabilities		818,086			784,184
SHAREHOLDERS’ EQUITY
Common stock - $2.00 par value; 50,000,000 shares authorized; 23,600,878 and 23,636,724 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		47,202			47,273
Additional paid-in-capital		14,416			14,451
Retained earnings		23,552			21,001
Accumulated other comprehensive loss		(10,326	)		(11,984	)
Total shareholders’ equity		74,844			70,741
Total liabilities and shareholders’ equity		892,930		$	854,925

The accompanying notes are an integral part of these consolidated financial statements.

NEW PEOPLES BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

(UNAUDITED)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
INTEREST AND DIVIDEND INCOME
Loans including fees	$	10,540		9,374	$	20,452	$	18,587
Federal funds sold		3		2		5		3
Interest-earning deposits with banks		663		1,009		1,355		1,835
Investments		711		583		1,413		1,113
Dividends on equity securities (restricted)		41		43		84		86
Total interest and dividend income		11,958		11,011		23,309		21,624

INTEREST EXPENSE
Deposits		3,450		3,508		6,899		6,658
Borrowed funds		294		533		586		1,066
Total interest expense		3,744		4,041		7,485		7,724

NET INTEREST INCOME		8,214		6,970		15,824		13,900

PROVISION FOR CREDIT LOSSES		154		472		413		429

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		8,060		6,498		15,411		13,471

NONINTEREST INCOME
Service charges and fees		899		967		1,776		1,882
Card processing and interchange		988		971		1,853		1,866
Financial services fees		356		372		674		694
Net gain on sale and disposal of premises and equipment		1		53		2		20
Other noninterest income		192		169		544		391
Total noninterest income		2,436		2,532		4,849		4,853

NONINTEREST EXPENSES
Salaries and employee benefits		3,652		3,594		7,450		7,241
Occupancy and equipment expense		874		861		1,858		1,730
Data processing and telecommunications		665		617		1,299		1,261
Other operating expenses		2,022		1,766		3,878		3,583
Total noninterest expenses		7,213		6,838		14,485		13,815

INCOME BEFORE INCOME TAXES		3,283		2,192		5,775		4,509

INCOME TAX EXPENSE		751		508		1,335		1,039

NET INCOME	$	2,532		1,684	$	4,440	$	3,470

Earnings per share
Basic and diluted	$	0.11		0.07	$	0.19	$	0.15

Average Weighted Shares of Common Stock
Basic and diluted		23,607,372		23,692,984		23,616,941		23,714,675

The accompanying notes are an integral part of these consolidated financial statements.

NEW PEOPLES BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(IN THOUSANDS)

(UNAUDITED)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024

NET INCOME	$	2,532		$	1,684		$	4,440		$	3,470

Other comprehensive income (loss):
Investment securities activity
Unrealized gains (losses) arising during the period		(280	)		786			2,099			(271	)
Related tax (expense) benefit		58			(165	)		(441	)		57
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(222	)		621			1,658			(214	)
TOTAL COMPREHENSIVE INCOME	$	2,310		$	2,305		$	6,098		$	3,256

The accompanying notes are an integral part of these consolidated financial statements.

NEW PEOPLES BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(IN THOUSANDS INCLUDING SHARE DATA)

(UNAUDITED)


	Shares of Common Stock			Common Stock			Additional Paid-in- Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance, December 31, 2023		23,746		$	47,492		$	14,514		$	14,458		$	(11,653	)	$	64,811
Net income		—			—			—			1,786			—			1,786
Other comprehensive loss, net of tax		—			—			—			—			(835	)		(835	)
Cash dividend declared ($0.07 per share)		—			—			—			(1,661	)		—			(1,661	)
Repurchase of common stock		(34	)		(69	)		(16	)		—			—			(85	)
Balance, March 31, 2024		23,712		$	47,423		$	14,498		$	14,583		$	(12,488	)	$	64,016

Net income		—			—			—			1,684			—			1,684
Other comprehensive income, net of tax		—			—			—			—			621			621
Repurchase of common stock		(36	)		(71	)		(19	)		—			—			(90	)
Balance June 30, 2024		23,676		$	47,352		$	14,479		$	16,267		$	(11,867	)	$	66,231


Balance, December 31, 2024		23,637		$	47,273		$	14,451		$	21,001		$	(11,984	)	$	70,741
Net income		—			—			—			1,908			—			1,908
Other comprehensive income, net of tax		—			—			—			—			1,880			1,880
Cash dividend declared ($0.08 per share)		—			—			—			(1,889	)		—			(1,889	)
Repurchase of common stock		(23	)		(45	)		(23	)		—			—			(68	)
Balance, March 31, 2025		23,614		$	47,228		$	14,428		$	21,020		$	(10,104	)	$	72,572

Net income		—			—			—			2,532			—			2,532
Other comprehensive loss, net of tax		—			—			—			—			(222	)		(222	)
Repurchase of common stock		(13	)		(26	)		(12	)		—			—			(38	)
Balance June 30, 2025		23,601		$	47,202		$	14,416		$	23,552		$	(10,326	)	$	74,844

The accompanying notes are an integral part of these consolidated financial statements.

NEW PEOPLES BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(IN THOUSANDS)

(UNAUDITED)


	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	4,440		$	3,470
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		745			827
Provision for (recovery of) credit losses		413			429
Income on bank owned life insurance		—			(37	)
Gain on sale of mortgage loans		(9	)		(4	)
Gain on sale or disposal of premises and equipment		(2	)		(20	)
Gain on sale of other real estate owned		(6	)		(34	)
Loans originated for sale		(380	)		(105	)
Proceeds from sales of loans originated for sale		389			109
Net amortization/accretion of bond premiums/discounts		37			125
Deferred tax benefit		—			(260	)
Net change in:
Accrued interest receivable		(123	)		14
Other assets		(542	)		(744	)
Accrued interest payable		(15	)		473
Accrued expenses and other liabilities		(102	)		(300	)
Net cash provided by operating activities		4,845			3,943

CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans		(38,350	)		(1,798	)
Purchase of securities available-for-sale		(4,770	)		(8,048	)
Proceeds from repayments and maturities of securities available-for-sale		6,067			5,188
Net purchase of equity securities (restricted)		(258	)		(36	)
Payments for the purchase of premises and equipment and software		(444	)		(1,488	)
Proceeds from sale of premises and equipment		2			1,033
Proceeds from sale of other real estate owned		50			108
Proceeds from bank owned life insurance benefit		5,417			—
Net cash used in investing activities		(32,286	)		(5,041	)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings		5,000			—
Repayment of long-term debt		(3,000	)		—
Net change in noninterest bearing deposits		8,629			(7,259	)
Net change in interest-bearing deposits		23,298			34,020
Dividends paid		(1,889	)		(1,661	)
Repurchase of common stock		(106	)		(175	)
Net cash provided by financing activities		31,932			24,925

Net increase in cash and cash equivalents		4,491			23,827
Cash and cash equivalents, beginning of the period		67,668			64,977
Cash and cash equivalents, end of the period	$	72,159		$	88,804

Supplemental disclosure of cash paid during the period for:
Interest	$	7,500		$	7,251
Taxes		880			1,000
Supplemental disclosure of non-cash transactions:
Transfer of loans to other real estate owned		14			20
Change in unrealized losses on securities available-for-sale		2,099			(271	)

The accompanying notes are an integral part of these consolidated financial statements.

NEW PEOPLES BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 NATURE OF OPERATIONS

Nature of Operations – New Peoples Bankshares, Inc. (New Peoples or the Company) is a financial holding company whose principal activity is the ownership and management of a community bank, New Peoples Bank, Inc. (the Bank). New Peoples and the Bank are organized and incorporated under the laws of the Commonwealth of Virginia. 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 Board of Governors of the Federal Reserve System (the Federal Reserve). The Bank provides general banking services to individuals, small and medium size businesses and the professional community of southwest Virginia, southern West Virginia, western North Carolina and northeastern Tennessee. These services include commercial and consumer loans along with traditional deposit products such as checking and savings accounts.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements conform to U. S. generally accepted accounting principles (GAAP) and to general industry practices. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position as of June 30, 2025 and December 31, 2024, and the results of operations for the three- and six-month periods ended June 30, 2025 and 2024. The Notes included herein should be read in conjunction with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period.

The consolidated financial statements include New Peoples, the Bank, NPB Insurance Services, Inc., and NPB Web Services, Inc. (hereinafter, collectively referred to as the Company, we, us or our). All significant intercompany balances and transactions have been eliminated. In accordance with Accounting Standards Codification (ASC) 942, Financial Services – Depository and Lending, NPB Capital Trust I and 2 are not included in the consolidated financial statements.

The preparation of financial statements in conformity with GAAP 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 credit losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions.

Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income or shareholders’ equity.

The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in the Company’s Annual report on Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2024 except for the following:

Accounting Standards Adopted in 2025 –

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this ASU require an entity to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, which is greater than five percent of the amount computed by multiplying pretax income by the entity’s applicable statutory rate, on an annual basis. Additionally, the amendments in this ASU require an entity to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions that are equal to or greater than five percent of total income taxes paid (net of refunds received). Lastly, the amendments in this ASU require an entity to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 was effective for the Company on January 1, 2025. The adoption of this standard had no material impact on the consolidated financial statements.

NOTE 3 EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted average number of shares outstanding during each period. Diluted earnings per share reflect the additional common shares that would have been outstanding if dilutive potential common shares had been issued. For the three- and six-month periods ended June 30, 2025 and 2024, there were no potential common shares. Basic and diluted net income per common share calculations follow:

Schedule of basic and diluted net loss per common share calculations
(Dollars in thousands, except per share data)	For the three months ended June 30,				For the six months ended June 30,
	2025		2024		2025		2024
Net income	$	2,532	$	1,684	$	4,440	$	3,470
Weighted average shares outstanding		23,607,372		23,692,984		23,616,941		23,714,675
Weighted average dilutive shares outstanding		23,607,372		23,692,984		23,616,941		23,714,675

Basic and diluted earnings per share	$	0.11	$	0.07	$	0.19	$	0.15

NOTE 4 CAPITAL

Capital Requirements and Ratios

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

To qualify as a "Small Bank Holding Company" under federal regulations, a bank must have consolidated assets of $3.0 billion or less. The primary benefit of being deemed a "Small Bank Holding Company" is the exemption from the requirement to maintain consolidated regulatory capital ratios; instead, regulatory capital ratios only apply at the subsidiary bank level.

The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (BASEL III rules) became fully phased in on January 1, 2019. Under the BASEL III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer required is 2.50%. At June 30, 2025, the Bank had a capital conservation buffer of 7.86%. Amounts recorded to accumulated other comprehensive income (loss) are not included in computing regulatory capital. Management believes as of June 30, 2025, the Bank met all capital adequacy requirements to which it was subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2025, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution's category.

In February 2019, the U.S. federal bank regulatory agencies approved a final rule modifying their regulatory capital rules and providing an option to phase in over a three-year period the Day 1 adverse regulatory capital effects of the Current Expected Credit Loss (“CECL”) accounting standard. Additionally, in March 2020, the U.S. federal bank regulatory agencies issued an interim final rule that provides banking organizations an option to delay the estimated CECL impact on regulatory capital for an additional two years for a total transition period of up to five years. The final rule was adopted and became effective in September 2020. The Company implemented the CECL model commencing January 1, 2023, and elected not to phase in the effect of CECL on regulatory capital.

The Bank’s actual capital amounts and ratios are presented in the following table as of June 30, 2025 and December 31, 2024, respectively.

Schedule of bank’s actual capital amounts and ratios presented
		Actual		Minimum Capital Requirement		Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)	Amount		Ratio	Amount	Ratio	Amount	Ratio
June 30, 2025:
Total capital to risk weighted assets	$	104,547	15.81%	$ 52,908	8.00%	$ 66,135	10.00%
Tier 1 capital to risk weighted assets		96,278	14.56%	39,681	6.00%	52,908	8.00%
Tier 1 capital to average assets		96,278	10.74%	35,862	4.00%	44,827	5.00%
Common equity Tier 1 capital
to risk weighted assets		96,278	14.56%	29,761	4.50%	42,988	6.50%

December 31, 2024:
Total capital to risk weighted assets	$	101,769	16.19%	$ 50,300	8.00%	$ 62,875	10.00%
Tier 1 capital to risk weighted assets		93,907	14.94%	37,725	6.00%	50,300	8.00%
Tier 1 capital to average assets		93,907	10.70%	35,113	4.00%	43,892	5.00%
Common equity Tier 1 capital
to risk weighted assets		93,907	14.94%	28,294	4.50%	40,869	6.50%

NOTE 5 INVESTMENT SECURITIES

The amortized cost and estimated fair value of available-for-sale (“AFS”) securities as of June 30, 2025 and December 31, 2024 are as follows:

Schedule of securities amortized cost and estimated fair value
				Gross		Gross		Approximate
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
June 30, 2025
U.S. Treasuries	$	7,113	$	1	$	268	$	6,846
U.S. Government Agencies		10,208		34		463		9,779
Taxable municipals		24,241	-		5,077		19,164
Corporate bonds		2,500	3		201		2,302
Mortgage backed securities		65,758	92		7,192		58,658
Total securities available-for-sale	$	109,820	$	130	$	13,201	$	96,749

December 31, 2024
U.S. Treasuries	$	8,370	$	-	$	409	$	7,961
U.S. Government Agencies		9,380		11		586		8,805
Taxable municipals		23,940		-		5,416		18,524
Corporate bonds		2,499		-		246		2,253
Mortgage backed securities		66,965		11		8,535		58,441
Total securities available-for-sale	$	111,154	$	22	$	15,192	$	95,984

The following table details unrealized losses and related fair values in the AFS portfolio. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2025 and December 31, 2024.


		Less than 12 Months				12 Months or More				Total
(Dollars in thousands)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2025
U.S. Treasuries	$	-	$	-	$	6,113	$	268	$	6,113	$	268
U.S. Government Agencies		1,503		11		5,623		452		7,126		463
Taxable municipals		2,094		205		22,147		4,872		24,241		5,077
Corporate bonds		-		-		2,000		201		2,000		201
Mortgage backed securities		9,488		170		47,414		7,022		56,902		7,192
Total	$	13,085	$	386	$	83,297	$	12,815	$	96,382	$	13,201

December 31, 2024
U.S. Treasuries	$	980	$	20	$	6,981	$	389	$	7,961	$	409
U.S. Government Agencies		2,221		38		6,026		548		8,247		586
Taxable municipals		1,559		212		16,965		5,204		18,524		5,416
Corporate bonds		499		1		1,755		245		2,254		246
Mortgage backed securities		14,982		311		42,018		8,224		57,000		8,535
Total	$	20,241	$	582	$	73,745	$	14,610	$	93,986	$	15,192

As of June 30, 2025, the available-for-sale portfolio included 179 investments for which the fair market value was less than amortized cost. As of December 31, 2024, the available-for-sale portfolio included 195 investments for which the fair market value was less than amortized cost. Management believes that all unrealized losses have resulted from temporary changes in the interest rates and current market conditions and are not a result of credit deterioration. Management does not plan to sell, and it is not likely that the Bank will be required to sell any of the securities referenced in the table above before recovery of their amortized cost. None of the individual securities are past due as to principal or interest payments and a number of these securities have explicit or implicit payment guarantees. The remaining securities have credit ratings at or above that necessary to be considered “bank qualified.”

Investment securities with a carrying value of $35.5 million and $35.2 million as of June 30, 2025 and December 31, 2024, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

There were no sales of available-for-sale investment securities during the three or six months ended June 30, 2025 and 2024.

The amortized cost and fair value of investment securities as of June 30, 2025, 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 in thousands)		Amortized		Fair		Average
Securities Available-for-Sale		Cost		Value		Yield
Due in one year or less	$	3,739	$	3,677		1.41%
Due after one year through five years	12,357		11,895		2.88%
Due after five years through ten years		23,553		22,118		3.32%
Due after ten years		70,171		59,059		2.32%
Total	$	109,820	$	96,749		2.57%

The Bank, as a member bank of the Federal Reserve Bank of Richmond (“Federal Reserve Bank”) and the Federal Home Loan Bank of Atlanta (FHLB), is required to hold stock in each. The Bank also owns stock in CBB Financial Corp., which is a correspondent of the Bank. These equity securities, which are included in other assets on the consolidated balance sheet, are restricted from trading and are recorded at a cost of $3.0 million and $2.7 million as of June 30, 2025 and December 31, 2024, respectively. The stock has no quoted market value and no ready market exists. When evaluating these securities for impairment, their value is determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. Equity securities are viewed as long-term investments and management believes the Company has the ability and the intent to hold these securities until their value is recovered.

NOTE 6 LOANS

Loans receivable outstanding as of June 30, 2025, and December 31, 2024, are summarized as follows:

Schedule of loans receivable outstanding
(Dollars in thousands)	June 30, 2025		December 31, 2024
Real estate secured:
Commercial	$	250,962	$	243,646
Construction and land development		39,671		36,112
Residential 1-4 family		249,221		234,860
Multifamily		37,715		32,379
Farmland		20,704		16,921
Total real estate loans		598,273		563,918
Commercial		60,320		60,587
Agriculture		5,259		4,025
Consumer installment and all other loans		31,963		29,006
Total loans	$	695,815	$	657,536

Also included in total loans above are deferred loan fees of $2.2 million and $2.0 million as of June 30, 2025 and December 31, 2024, respectively. Deferred loan costs were $2.0 million and $1.9 million, as of June 30, 2025 and

December 31, 2024, respectively. Income from net deferred fees and costs is recognized over the lives of the respective loans as a yield adjustment. If loans repay prior to scheduled maturities any unamortized fees or costs are recognized at that time.

Loans receivable on nonaccrual status as of June 30, 2025, and December 31, 2024, are summarized as follows:

Schedule of loans receivable nonaccrual status
				June 30, 2025						December 31, 2024
				With No Allowance		With an Allowance		Total		With No Allowance		With an Allowance		Total
(Dollars in thousands)
Real estate secured:
	Commercial		$	193	$	-	$	193	$	411	$	-	$	411
	Construction and land development			28		-		28		300		-		300
	Residential 1-4 family			2,239		178		2,417		2,232		178		2,410
	Farmland			19		-		19		-		-		-
		Total real estate loans		2,479		178		2,657		2,943		178		3,121
Commercial				53		-		53		66		-		66
Agriculture				-		752		752		16		-		16
Consumer installment loans and other loans				26		-		26		56		14		70

Total loans receivable on nonaccrual status			$	2,558	$	930	$	3,488	$	3,081	$	192	$	3,273

Total interest income not recognized on nonaccrual loans for the three and six months ended June 30, 2025, and June 30, 2024, was $24,000 and $62,000 and $43,000 and $69,000, respectively.

The Company evaluates loans that do not share risk characteristics on an individual basis utilizing the collateral or discounted cash flow methods. The following table presents the unpaid principal balance of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to those loans as of June 30, 2025 and December 31, 2024:

Schedule of summary of impaired loans
			June 30, 2025				December 31, 2024
			Unpaid Principal Balance		Related Allowance		Unpaid Principal Balance		Related Allowance
(Dollars in thousands)
Real estate secured:
	Commercial	$	3,242	$	-	$	396	$	-
	Residential 1-4 family		660		178		1,008		177
Total real estate loans			3,902		178		1,704		177
Agriculture			752		28		-		-
Consumer installment loans and other loans			-		-		13		3

Total		$	4,654	$	206	$	1,717	$	180

The following table is an age analysis of past due loans receivable as of June 30, 2025, segregated by class:

Schedule of analysis of past due loans receivable
June 30, 2025 (Dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
Real estate secured:
Commercial	$	—	$	7	$	186	$	193	$	250,769	$	250,962
Construction and land development		90		—		—		90		39,581		39,671
Residential 1-4 family		1,931		342		755		3,028		246,193		249,221
Multifamily		—		—		—		—		37,715		37,715
Farmland		—		—		—		—		20,704		20,704
Total real estate loans		2,021		349		941		3,311		594,962		598,273
Commercial		62		—		24		86		60,234		60,320
Agriculture		—		—		752		752		4,507		5,259
Consumer installment and all other loans		169		23		14		206		31,757		31,963
Total loans	$	2,252	$	372	$	1,731	$	4,355	$	691,460	$	695,815

The following table is an age analysis of past due loans receivable as of December 31, 2024, segregated by class:

December 31, 2024 (Dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
Real estate secured:
Commercial	$	—	$	255	$	156	$	411	$	243,235	$	243,646
Construction and land development		3		333		—		336		35,776		36,112
Residential 1-4 family		2,413		1,810		510		4,733		230,127		234,860
Multifamily		—		—		—		—		32,379		32,379
Farmland		207		—		—		207		16,714		16,921
Total real estate loans		2,623		2,398		666		5,687		558,231		563,918
Commercial		166		77		—		243		60,344		60,587
Agriculture		37		—		—		37		3,988		4,025
Consumer installment and all other loans		89		88		30		207		28,799		29,006
Total loans	$	2,915	$	2,563	$	696	$	6,174	$	651,362	$	657,536

The Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans receivable as to credit risk. The Company uses the following definitions for risk ratings:

Pass - Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors.

Special Mention - Loans in this category are currently protected but are potentially weak, including adverse trends in borrower’s operations, credit quality or financial strength. Those loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances. Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Company’s credit position at some future date.

Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified doubtful have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.

The following table presents the credit risk grade of loans by origination year as of June 30, 2025:

Schedule of credit risk grade of loans
As of June 30, 2025
(Dollars are in thousands)	2025			2024			2023			2022			2021			Prior			Revolving			Total
Commercial real estate
Pass	$	19,176		$	19,884		$	45,051		$	45,934		$	41,956		$	76,219		$	351		$	248,571
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			186			2,197			8			—			2,391
Total commercial real estate	$	19,176		$	19,884		$	45,051		$	46,120		$	44,153		$	76,227		$	351		$	250,962

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Construction and Land Development
Pass	$	5,511		$	22,934		$	3,254		$	2,171		$	2,282		$	3,491		$	—		$	39,643
Special mention		—			—			—			—			—			—			—			—
Substandard		—			28			—			—			—			—			—			28
Total construction and land development	$	5,511		$	22,962		$	3,254		$	2,171		$	2,282		$	3,491		$	—		$	39,671

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Residential 1-4 family
Pass	$	19,084		$	20,398		$	28,267		$	27,013		$	38,678		$	81,746		$	31,311		$	246,497
Special mention		—			—			—			—			—			287			—			287
Substandard		—			104			255			—			—			1,930			148			2,437
Total residential 1-4 family	$	19,084		$	20,502		$	28,522		$	27,013		$	38,678		$	83,963		$	31,459		$	249,221

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Multifamily
Pass	$	7,648		$	1,454		$	4,611		$	9,682		$	6,575		$	7,745		$	—		$	37,715
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Total multifamily	$	7,648		$	1,454		$	4,611		$	9,682		$	6,575		$	7,745		$	—		$	37,715

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Farmland
Pass	$	5,048		$	2,648		$	1,334		$	1,993		$	2,707		$	6,821		$	—		$	20,551
Special mention		—			—			—			—			—			134			—			134
Substandard		—			—			—			—			—			19			—			19
Total farmland	$	5,048		$	2,648		$	1,334		$	1,993		$	2,707		$	6,974		$	—		$	20,704

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Commercial
Pass	$	11,499		$	13,661		$	11,115		$	3,394		$	1,768		$	3,139		$	15,688		$	60,264
Special mention		—			—			—			—			—			2			—			2
Substandard		—			—			—			—			24			—			30			54
Total commercial	$	11,499		$	13,661		$	11,115		$	3,394		$	1,792		$	3,141		$	15,718		$	60,320

Current period gross charge-offs	$	—		$	(8	)	$	—		$	—		$	—		$	—		$	(10	)	$	(18	)

Agriculture
Pass	$	846		$	804		$	198		$	281		$	141		$	131		$	2,106		$	4,507
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Doubtful		—			305			—			—			—			—			447			752
Total agriculture	$	846		$	1,109		$	198		$	281		$	141		$	131		$	2,553		$	5,259

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	(50	)	$	(50	)

Consumer and All Other
Pass	$	9,562		$	11,244		$	6,191		$	1,905		$	972		$	938		$	1,126		$	31,938
Special mention		—			—			—			—			—			—			—			—
Substandard		—			2			13			10			—			—			—			25
Total consumer and all other	$	9,562		$	11,246		$	6,204		$	1,915		$	972		$	938		$	1,126		$	31,963

Current period gross charge-offs	$	(65	)	$	(16	)	$	(12	)	$	(5	)	$	(1	)	$	(2	)	$	(14	)	$	(115	)

Total	$	78,374		$	93,466		$	100,289		$	92,569		$	97,300		$	182,610		$	51,207		$	695,815
Total current period gross charge-offs	$	(65	)	$	(24	)	$	(12	)	$	(5	)	$	(1	)	$	(2	)	$	(74	)	$	(183	)

The following table presents the credit risk grade of loans by origination year as of December 31, 2024:

As of December 31, 2024
(Dollars are in thousands)	2024			2023			2022			2021			2020			Prior			Revolving			Total
Commercial real estate
Pass	$	20,653		$	47,052		$	43,553		$	46,902		$	27,155		$	56,369		$	1,541		$	243,225
Special mention		—			—			—			—			—			9			—			9
Substandard		—			—			255			141			—			16			—			412
Total commercial real estate	$	20,653		$	47,052		$	43,808		$	47,043		$	27,155		$	56,394		$	1,541		$	243,646

Current period gross charge-offs	$	—		$	—		$	—		$	(179	)	$	—		$	—		$	(1	)	$	(180	)

Construction and Land Development
Pass	$	17,654		$	5,078		$	6,240		$	3,019		$	1,719		$	2,089		$	—		$	35,799
Special mention		—			—			—			—			—			12			—			12
Substandard		301			—			—			—			—			—			—			301
Total construction and land development	$	17,955		$	5,078		$	6,240		$	3,019		$	1,719		$	2,101		$	—		$	36,112

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Residential 1-4 family
Pass	$	19,094		$	27,861		$	29,510		$	38,329		$	11,265		$	78,424		$	26,933		$	231,416
Special mention		—			—			—			—			—			319			—			319
Substandard		104			257			42			723			238			1,647			114			3,125
Total residential 1-4 family	$	19,198		$	28,118		$	29,552		$	39,052		$	11,503		$	80,390		$	27,047		$	234,860

Current period gross charge-offs	$	—		$	(38	)	$	—		$	—		$	—		$	(37	)	$	—		$	(75	)

Multifamily
Pass	$	1,564		$	4,829		$	10,313		$	6,818		$	2,505		$	6,350		$	—		$	32,379
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Total multifamily	$	1,564		$	4,829		$	10,313		$	6,818		$	2,505		$	6,350		$	—		$	32,379

Current period gross charge-offs	$	—		$	(53	)	$	—		$	—		$	—		$	(42	)	$	—		$	(95	)

Farmland
Pass	$	2,669		$	1,333		$	2,045		$	2,812		$	730		$	7,186		$	—		$	16,775
Special mention		—			—			—			—			—			146			—			146
Substandard		—			—			—			—			—			—			—			—
Total farmland	$	2,669		$	1,333		$	2,045		$	2,812		$	730		$	7,332		$	—		$	16,921

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Commercial
Pass	$	18,298		$	13,490		$	4,780		$	2,305		$	801		$	2,560		$	18,284		$	60,518
Special mention		—			—			—			—			—			2			—			2
Substandard		1			—			—			31			—			—			35			67
Total commercial	$	18,299		$	13,490		$	4,780		$	2,336		$	801		$	2,562		$	18,319		$	60,587

Current period gross charge-offs	$	—		$	(34	)	$	(55	)	$	—		$	—		$	—		$	(73	)	$	(162	)

Agriculture
Pass	$	1,333		$	322		$	339		$	232		$	35		$	195		$	1,553		$	4,009
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			16			—			16
Total agriculture	$	1,333		$	322		$	339		$	232		$	35		$	211		$	1,553		$	4,025

Current period gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Consumer and All Other
Pass	$	14,500		$	7,982		$	2,706		$	1,276		$	424		$	880		$	1,158		$	28,926
Special mention		—			—			—			—			—			—			—			—
Substandard		17			22			20			19			2			—			—			80
Total consumer and all other	$	14,517		$	8,004		$	2,726		$	1,295		$	426		$	880		$	1,158		$	29,006

Current period gross charge-offs	$	(163	)	$	(62	)	$	(14	)	$	(7	)	$	(9	)	$	—		$	(24	)	$	(279	)

Total	$	96,188		$	108,226		$	99,803		$	102,607		$	44,874		$	156,220		$	49,618		$	657,536
Total current period gross charge-offs	$	(163	)	$	(187	)	$	(69	)	$	(186	)	$	(9	)	$	(79	)	$	(98	)	$	(791	)

NOTE 7 ALLOWANCE FOR CREDIT LOSSES FOR LOANS (“ACLL”)

In determining the amount of our allowance for credit losses, we rely on an analysis of our loan portfolio, our experience and our evaluation of general economic conditions. If our assumptions prove to be incorrect, our current allowance may not be sufficient to cover future loan losses and we may experience significant increases to our provision.

The following table presents a disaggregated analysis of activity in the allowance for credit losses for loans as of June 30, 2025 and December 31, 2024:

Schedule of allowance for credit losses for loans
		Real estate secured
(Dollars are in thousands)		Commercial		Construction and Land Development		Residential 1-4 family		Multifamily		Farmland		Commercial		Agriculture		Consumer and All Other		Total
Three months ended June 30, 2025
Beginning balance	$	2,592	$	316	$	2,909	$	372	$	155	$	771	$	114	$	603	$	7,832
Charge-offs		-		-		-		-		-		-		(50)		(55)		(105)
Recoveries		-		11		12		3		-		1		-		39		66
Provision for credit losses		(31)		33		77		57		27		(35)		(2)		29		155
Ending balance	$	2,561	$	360	$	2,998	$	432	$	182	$	737	$	62	$	616	$	7,948


		Real estate secured
(Dollars are in thousands)		Commercial		Construction and Land Development		Residential 1-4 family		Multifamily		Farmland		Commercial		Agriculture		Consumer and All Other		Total
Six months ended June 30, 2025
Beginning balance	$	12,565	$	322	$	2,923	$	382	$	149	$	751	$	36	$	556	$	7,684
Charge-offs		-		-		-		-		-		(18)		(50)		(115)		(183)
Recoveries		-		26		22		6		3		2		-		66		125
Provision for credit losses		(4)		12		53		44		30		2		76		109		322
Ending balance	$	2,561	$	360	$	2,998	$	432	$	182	$	737	$	62	$	616	$	7,948



		Real estate secured
(Dollars are in thousands)		Commercial		Construction and Land Development		Residential 1-4 family		Multifamily		Farmland		Commercial		Agriculture		Consumer and All Other		Total
Year ended December 30, 2024
Beginning balance	$	-	$	104	$	255	$	-	$	-	$	1,930	$	148	$	2,437	$	4,874
Charge-offs		(180)		-		(75)		(95)		-		(162)		-		(279)		(791)
Recoveries		106		44		100		-		297		9		-		157		713
Provision for credit losses		2,639		174		2,643		477		(148)		(1,026)		(112)		(1,759)		2,888
Ending balance	$	12,565	$	322	$	2,923	$	382	$	149	$	751	$	36	$	556	$	7,684

Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

NOTE 8 MODIFICATIONS MADE TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off against the allowance for credit losses, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

On February 15, 2025, severe flash flooding occurred in Tazewell and Buchanan, Counties in Virgina. On September 27, 2024, Hurricane Helene passed through western North Carolina, southwest Virginia and northeast Tennessee, causing flood and wind damage in its path. To assist borrowers impacted by these natural disasters, we offered short-term payment deferrals of 3 months. As of June 30, 2025, the deferral periods have ended and 51 loans totaling $7.9 million participating in the deferral program have commenced regular payments. One loan totaling $178,000, which was extended beyond the terms of the short-term deferral program, was in default. As of December 31, 2024, 36 loans totaling $9.2 million were participating in the deferral program. One of these loans, a residential mortgage loan totaling $178,000, received an additional 3-month deferral, due to the extent of damage to the property. There were no loans modified to borrowers experiencing financial difficulties in the three and six months ended June 30, 2025.

NOTE 9 CREDIT ALLOWANCE FOR UNFUNDED COMMITMENTS

The Company maintains a separate allowance for credit losses on off-balance-sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheet. The allowance for credit losses for off-balance-sheet credit exposures is adjusted through a provision for credit losses in the income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement.

As of June 30, 2025 and December 31, 2024, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was $496,000 and $404,000, respectively. During the three and six months ended June 30, 2025 and June 30, 2024, $0 and $92,000 and $50,000 and $3 was included in the Provision for Credit Losses.

NOTE 10 OTHER REAL ESTATE OWNED

The following table summarizes the activity in other real estate owned for the six months ended June 30, 2025, and the year ended December 31, 2024:

Schedule of activity in other real estate owned
(Dollars in thousands)	June 30, 2025			December 31, 2024
Balance, beginning of period	$	87		$	157
Additions		14			1,330
Proceeds from sales		(50	)		(1,474	)
Adjustment of carrying value		—			(9	)
Net gains from sales		6			83
Balance, end of period	$	57		$	87

As of June 30, 2025 four loans secured by residential real estate, totaling $278,000 were in the process of foreclosure.

NOTE 11 FAIR VALUES

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures topic of Financial Accounting Standards Board (the FASB) ASC, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market and in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market and in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Level 2: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are valued using other financial instruments, the parameters of which can be directly observed.

Level 3: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy are as follows:

Investment Securities Available-for-sale - Investment securities AFS are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices. The Company’s AFS securities, totaling $96.7 million and $96.0 million as of June 30, 2025 and December 31, 2024, respectively, are the only assets whose fair values are measured on a recurring basis using Level 2 inputs from an independent pricing service.

Collateral Dependent Loans with an ACL - In accordance with ASC 326, we may determine that an individual loan exhibits unique risk characteristics which differentiate it from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the allowance for credit losses are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. We reevaluate the fair value of collateral supporting collateral dependent loans on a quarterly basis. The fair value of real estate collateral supporting collateral dependent loans is evaluated by appraisal services using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice.

Other Real Estate Owned –Other real estate owned is adjusted to fair value upon transfer of the loans, or former bank premises, to other real estate owned. These assets are carried at the lower of their carrying value or fair value. Fair value is based upon observable market prices, when available, reduced by estimated disposition costs, which the Company considers to be nonrecurring Level 2 inputs. When observable market prices are not available, management determines the fair value of the foreclosed asset using independent third-party appraisals, evaluated to determine whether or not the property is further impaired below the appraised value, and adjusts for estimated costs of disposition. The Company records foreclosed assets as nonrecurring Level 3.

Assets and liabilities measured at fair value are as follows as of June 30, 2025 and December 31, 2024:


June 30, 2025 (Dollars in thousands)	Quoted market price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
(On a recurring basis) Available-for-sale investments
U.S. Treasuries	$	—	$	6,846	$	—
U.S. Government Agencies		—		9,779		—
Taxable municipals		—		19,164		—
Corporate bonds		—		2,302		—
Mortgage-backed securities		—		58,658		—

(On a non-recurring basis) Other real estate owned		—		—		57
Collateral dependent loans with ACL:
Agriculture		—		—		277
Total	$	—	$	96,749	$	334


December 31, 2024 (Dollars in thousands)	Quoted market price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
(On a recurring basis) Available-for-sale investments
U.S. Treasuries	$	—	$	7,961		—
U.S. Government Agencies		—		8,805	$	—
Taxable municipals		—		18,524		—
Corporate bonds		—		2,253		—
Mortgage-backed securities		—		58,441		—

(On a non-recurring basis) Other real estate owned		—		—		87
Collateral dependent loans with ACL:
Consumer installment and all other loans		—		—		11
Total	$	—	$	95,984	$	98

Not included in the tables above as of June 30, 2025 and December 31, 2024 is a residential 1-4 family mortgage loan totaling $178,000 that has a specific allowance for credit loss allocation of 100%.

For Level 3 assets measured at fair value on a recurring or non-recurring basis as of June 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:


(Dollars in thousands)		Fair Value at June 30, 2025		Fair Value at December 31, 2024	Valuation Technique	Significant Unobservable Inputs	General Range of Significant Unobservable Input Values

Collateral dependent loans with ACL:
Agriculture	$	277	$	-	Appraised Value	Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell	0 – 18%

Consumer installment and all other		-		11	Appraised Value/Other estimates from Independent Sources	Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell	0 – 18%

Other Real Estate Owned	$	57	$	87	Appraised Value/Comparable Sales/Other Estimates from Independent Sources	Discounts to reflect current market conditions and estimated costs to sell	0 – 18%

Fair Value of Financial Instruments

Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity that contractual right or obligation to either receive or deliver cash for another financial instrument.

The following summary presents the methodologies and assumptions used to estimate the fair value of the Company’s financial instruments presented below. The information used to determine fair value is highly subjective and judgmental in nature and, therefore, the results may not be precise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different.

The carrying amount and fair value of the Company’s financial instruments that are not required to be measured or reported at fair value on a recurring basis as of June 30, 2025, and December 31, 2024, are as follows:


						Fair Value Measurements
(Dollars in thousands)		Carrying Amount		Fair Value		Quoted market price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

June 30, 2025
Financial instruments – assets
Net loans	$	687,867	$	673,725	$	-	$	-	$	673,725

Financial instruments – liabilities
Time deposits		280,010		279,607		-		279,607		-
Borrowed funds		26,986		25,136		-		25,136		-

December 31, 2024
Financial instruments – assets
Net loans	$	649,852	$	633,023	$	-	$	-	$	633,023

Financial instruments – liabilities
Time deposits		268,739		268,509		-		268,509		-
Borrowed funds		24,986		23,071		-		23,071		-

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the estimates.

Estimated fair values have been determined by the Company using historical data, as generally provided in the Company’s regulatory reports, and an estimation methodology suitable for each category of financial instruments. The Company’s fair value estimates, methods and assumptions are set forth below for the Company’s other financial instruments.

The carrying values of cash and due from banks, federal funds sold, deposits with no stated maturities, and accrued interest approximates fair value and are excluded from the table above.

NOTE 12 LEASING ACTIVITIES

As of June 30, 2025, the Bank leases four branch offices, one administrative office, one loan production office and sublets a lot adjacent to another branch office. The lease agreements have maturity dates ranging from 2028 to December 2041. It is assumed that there are currently no circumstances in which the leases would be terminated prior to expiration. The weighted average remaining life of the lease terms as of June 30, 2025 was 6.75 years.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded to the lease term for each transaction. This methodology is expected to be used for any other subsequent lease agreements. The weighted average discount rate for the leases as of June 30, 2025 was 3.37%.

For the three and six months ended June 30, 2025 and 2024, operating lease expenses were $145,000 and $288,000; and $145,000 and $289,000, respectively.

The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. As of June 30, 2025, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands):


2025	$	287
2026		575
2027		596
2028		586
2029		492
Thereafter		1,243
Total lease payments		3,779
Less: imputed interest		(545)
Total	$	3,234

NOTE 13 BORROWED FUNDS

Borrowed funds totaled $26,986 and $24,986 as of June 30, 2025 and December 31, 2024, respectively. For additional information on borrowed funds, refer to Note 18 in Item 8 of Form 10-K for the year ended December 31, 2024. On January 7, 2025, a voluntary principal payment of $3.0 million was made on an outstanding trust preferred security. On June 30, 2025 a short-term advance of $5.0 million was drawn from FHLB.

NOTE 14 REVENUE FROM CONTRACTS WITH CUSTOMERS

All our revenue from contracts with customers as defined in ASC 606 is recognized within noninterest income. Refer to Note 24 in our Annual Report on Form 10-K for the year ended December 31, 2024 for a description of how each revenue stream is accounted for under ASC 606. The following table presents noninterest income by revenue stream for the three and six months ended June 30, 2025 and 2024:


	For the three months ended				For the six months ended
	June 30,				June 30,
(Dollars in thousands)		2025		2024		2025		2024
Service charges and fees	$	899	$	967	$	1,776	$		1,882
Card processing and interchange income		988		971		1,853			1,866
Financial services fees		356		372		674			694
Other noninterest income		193		222		546			411
Total noninterest income	$	2,436	$	2,532	$	4,849	$		4,853

NOTE 15 NONINTEREST EXPENSES

Other operating expenses, included as part of noninterest expenses, consisted of the following for the periods presented:

Schedule of noninterest expenses
	For the three months ended June 30,						For the six months ended June 30,
(Dollars in thousands)	2025			2024			2025			2024
Other operating expenses	$	934		$	864		$	1,813		$	1,759
ATM network expense		417			377			845			753
Legal, accounting, and professional
fees		234			216			471			450
Loan related expenses		175			101			254			195
FDIC insurance premiums		99			97			197			189
Advertising		89			77			156			130
Consulting fees		41			40			83			80
Printing and supplies		36			26			61			55
Other real estate owned expenses, net		(3	)		(32	)		(2	)		(28	)
Total other operating expenses	$	2,022		$	1,766		$	3,878		$	3,583

NOTE 16 RECENT ACCOUNTING DEVELOPMENTS

The following is a summary of recent authoritative announcements:

In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The FASB subsequently issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in ASU 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. Implementation of ASU 2024-03 may be applied prospectively or retrospectively. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Caution About Forward-Looking Statements

We make forward-looking statements in this quarterly report on Form 10-Q that are subject to risks and uncertainties. These forward-looking statements include statements regarding expectations, intentions, projections and beliefs concerning our profitability, liquidity, and allowance for credit losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. The words “believes,” “expects,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward looking statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Important factors that may cause actual results to differ from projections include:

the success or failure of our efforts to implement our business plan;
any required increase in our regulatory capital ratios;
satisfying other regulatory requirements that may arise from examinations, changes in the law and other similar factors;
deterioration of asset quality;
changes in the level of our nonperforming assets and charge-offs;
fluctuations of real estate values in our markets;
our ability to attract and retain talent;
demographical changes in our markets which negatively impact the local economy;
the uncertain outcome of current or future legislation or regulations or policies of state and federal regulators;
the successful management of interest rate risk;
the successful management of liquidity;
changes in general economic and business conditions in our market area and the United States in general;
credit risks inherent in making loans such as changes in a borrower’s ability to repay and our management of such risks;
competition with other banks and financial institutions, and companies outside of the banking industry, including online lenders and those companies that have substantially greater access to capital and other resources;
demand, development and acceptance of new products and services we have offered or may offer;
deposit flows and competition for deposits;
the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve, inflation, interest rate, market and monetary fluctuations;
the occurrence of significant natural disasters, including severe weather conditions, floods, health related issues and other catastrophic events;
geopolitical conditions, including trade restrictions and tariffs, and acts or threats of terrorism, international hostilities, or actions taken by the U.S. or other governments in response to trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the U.S. and abroad;
technology utilized by us, including the successful core operating system conversion in 2025;
our ability to successfully manage cybersecurity, including generative artificial intelligence risks;
our ability to assist in managing third party fraud against customer accounts including but not limited to check, credit and debit card, and electronic funds transfer fraud;
our reliance on third-party vendors and correspondent banks;
changes in generally accepted accounting principles;
changes in governmental regulations, tax rates and similar matters; and,
other risks, which may be described, from time to time, in our filings with the SEC.

Because of these uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. In addition, our past results of operations do not necessarily indicate our future results. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Critical Accounting Policies

For discussion of our significant accounting policies, see our Annual Report on Form 10-K for the year ended December 31, 2024, and Note 2 Summary of Significant Accounting Policies, in Item 1 of this Form 10-Q. Certain critical accounting policies affect the more significant judgments and estimates used in the preparation of our financial statements. Our most critical accounting policies relate to our allowance for credit losses.

The allowance for credit losses reflects the estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our borrowers were to deteriorate, resulting in an impairment of their ability to make payments, our estimates would be updated, and additional provisions could be required. For further discussion of the estimates used in determining the allowance for credit losses, we refer you to the section on “Asset Quality” in this discussion.

Overview and Highlights

Quarter-to-date highlights include:

Net income for the three months ended June 30, 2025 was $2.5 million, or $0.11 per share, an increase of $848,000, or 50.36%, from the $1.7 million or $0.07 per share reported for the same period in 2024.

Returns on average assets and equity of 1.15% and 13.91% for the second quarter of 2025, compared to 0.79% and 10.56% for the second quarter of 2024, respectively;

Net interest margin was 3.86% for the second quarter of 2025 compared to 3.41% for the second quarter of 2024;

Net interest income was $8.2 million for the second quarter of 2025, an increase of $1.2 million or 17.85%, compared to the second quarter of 2024;

Noninterest income was $2.4 million, a decrease of $96,000, or 3.79%, during the second quarter of 2025 compared to the second quarter of 2024; and

Noninterest expense was $7.2 million, an increase of $375,000, or 5.48%, for the second quarter of 2025 compared to the second quarter of 2024.

Comparison of the Three Months ended June 30, 2025 and 2024

Net interest income for the quarter ended June 30, 2025 was $8.2 million, an increase of $1.2 million, or 17.85%, when compared to the quarter ended June 30, 2024. During the second quarter of 2025, interest income increased $947,000 to $12.0 million due to the combination of an increase of 23 basis points (“bps”) in the yield on earning assets to 5.61% and a $31.7 million increase in the average balance of earning assets when compared to 2024. The loan portfolio was the primary driver of both increases, as the yield rose 31 bps to 6.20%, while the average balance increased $41.9 million compared to the quarter ended June 30, 2024. Investment securities contributed $125,000 as the average balance, excluding the unrealized loss, increased $4.2 million and the yield rose 37 bps, as we reinvest cash flows and grow the portfolio in a higher interest rate environment. Combined with the increased interest income, interest expense decreased $297,000 to $3.7 million during the second quarter of 2025 as compared to $4.0 million reported for the same period in 2024. The reduced interest expense is principally attributed to the cost of borrowed funds, which decreased 55 bps to 5.28%, as the related interest expense decreased $239,000. The decline was due to the decreased average balance related to a $10 million borrowing from the Federal Reserve Bank under the Bank Term Funding Program that was repaid in October 2024, combined with $4.2 million in principal payments made on trust preferred securities in October 2024 and January 2025. These principal payments reduced the average balance of borrowed funds by $14.1 million or 39.09% for the comparative quarters ended June 30, 2025 and 2024. In addition, the variable rate paid on the trust preferred securities decreased as overnight and short-term borrowing rates declined during the last half of 2024. As a result, the cost of total interest-bearing liabilities decreased 28 bps to 2.66% during the second quarter of 2025 as compared to the second quarter of 2024. The net interest margin increased 45 bps to 3.86% for the quarter ending June 30, 2025, as compared to 3.41% for the same period in 2024 due to the increase in the yield on earning assets outpacing the cost of funds.

The following table shows the rates paid on earning assets and interest-bearing liabilities for the periods indicated:

Net Interest Margin Analysis

Average Balances, Income and Expense, and Yields and Rates

Three Months Ended June 30,


				2025							2024
				Average		Income/		Yields/		Average			Income/		Yields/
(Dollars are in thousands)				Balance		Expense		Rates		Balance			Expense		Rates
ASSETS
	Loans ^{(1) (2)}		$	681,828	$	10,540		6.20%	$	639,918		$	9,374		5.89%
	Federal funds sold			276		3		4.43%		110			2		5.44%
	Interest bearing deposits in other banks			60,976		663		4.36%		75,549			1,009		5.37%
	Investment securities ⁽²⁾			111,272		752		2.71%		107,082			626		2.34%
	Total earning assets			854,352		11,958		5.61%		822,659			11,011		5.38%
	Less: Allowance for credit losses			(7,956)						(7,447)
	Non-earning assets			36,905						39,334
		Total assets	$	883,301					$	854,546

LIABILITIES AND SHAREHOLDERS’ EQUITY
	Interest-bearing demand deposits		$	72,194	$	128		0.71%	$	74,082		$	160		0.87%
	Savings and money market deposits			194,919		832		1.71%		169,190			676		1.61%
	Time deposits			275,114		2,490		3.63%		271,587			2,672		3.96%
	Total interest-bearing deposits			542,227		3,450		2.55%		514,859			3,508		2.74%
	Other borrowings			10,055		89		3.51%		20,000			209		4.13%
	Trust preferred securities			11,986		205		6.76%		16,186			324		7.93%
	Total borrowed funds			22,041		294		5.28%		36,186			533		5.83%
	Total interest-bearing liabilities			564,268		3,744		2.66%		551,045			4,041		2.94%
	Non-interest-bearing deposits			236,284						229,837
	Other liabilities			9,680						9,524
		Total liabilities		810,232						790,406
	Shareholders’ equity			73,069						64,140
		Total liabilities and shareholders’ equity	$	883,301						854,546
	Net interest income				$	8,214						$	6,970
	Net interest margin						3.86%							3.41%
	Net interest spread						2.95%							2.44%

⁽¹⁾ Nonaccrual loans and loans held for sale have been included in average loan balances.
⁽²⁾ Tax exempt income is not significant and has been treated as fully taxable.

Net interest income is affected by changes in both average interest rates and average volumes (balances) of interest-earning assets and interest-bearing liabilities. The following table sets forth the amounts of the total changes in interest income and interest expense which can be attributed to rates and volume for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Volume and Rate Analysis

Increase (decrease)

Three Months Ended June 30, 2025 Versus 2024

(Dollars in thousands)			Volume Effect		Rate Effect		Rate and Volume Effect		Change in Interest Income/ Expense
Interest income:
	Loans	$	616	$	492	$	58	$	1,166
	Federal funds sold		3		(1)		(1)		1
	Interest bearing deposits in other banks		(195)		(190)		39		(346)
	Investment securities		24		99		3		126
	Total earning assets		448		400		99		947

Interest expense:
	Interest-bearing demand deposits		(4)		(29)		1		(32)
	Savings and money market deposits		103		44		9		156
	Time deposits		35		(221)		4		(182)
	Other borrowings		(104)		(31)		15		(120)
	Trust preferred securities		(84)		(48)		13		(119)
	Total interest-bearing liabilities		(54)		(285)		42		(297)
	Change in net interest income	$	502	$	685	$	57	$	1,244

The provision for credit losses charged to the income statement for the quarter ended June 30, 2025 was $154,000 compared to $472,000 for the three months ended June 30, 2024. The second quarter 2025 provision reflects the impact of the loan growth while the provision recorded in 2024 was due to an increase in past due and nonperforming loans during the second quarter of 2024. The provision for credit losses on unfunded commitments was $0 for the second quarter of 2025 due to a reduction in the growth rate in commitments for construction loans which are expected to be drawn over the next 12-18 months. For a discussion of the factors affecting the allowance for credit losses, including provision expense, refer to Note 7, Allowance for Credit Losses for Loans, in Item 1 of this Form 10-Q.

Noninterest income totaling $2.4 million for the quarter ended June 30, 2025 decreased $96,000 compared to the quarter ended June 30, 2024. Modest decreases in earnings from service charges and financial services revenue totaling $68,000 and $16,000, respectively, and a gain on disposal of premises and equipment of $53,000 in 2024 that was not repeated in 2025 were partially offset by a $17,000 increase in card processing fees.

Noninterest expense was $7.2 million for the quarter ended June 30, 2025 compared to $6.8 million for the quarter ended June 30, 2024. The $375,000 dollar increase resulted from increases in salaries and benefits, occupancy, and data processing costs, which combined for an increase of $119,000, and increases in advertising, ATM network, loan processing, and other expenses which combined for an increase of $196,000. The increase in salaries and benefits is attributed to normal recurring salary adjustments and staffing costs for the recently opened loan production office. Occupancy costs were impacted by costs for the new loan production office. Advertising included costs for a program to refresh the bank branding, while loan costs were impacted by costs associated with a loan promotion.

As we progress with our planned core conversion, it is expected that additional costs related to overtime, meals and other expenses related to the installation, testing and training on the new system will be incurred during the remainder of 2025.

The efficiency ratio, which is defined as noninterest expense divided by the sum of net interest income plus noninterest income, decreased to 67.70% during the second quarter of 2025 from 71.96% for the second quarter of 2024. We continue to assess our operational procedures and structure to improve efficiencies and contain costs.

Income tax expense for the second quarter of 2025 totaled $751,000, an increase of $243,000, or 47.83%, from $508,000 recorded during the same period in 2024. This increase was in line with the increase in pre-tax income which increased $1.1 million or 49.77% for the comparative three months ended June 30, 2025 and 2024. The effective tax rate for the three months ended June 30, 2025, was 22.88%, compared to 23.18% for the same period in 2024.

While the signing of the One Big Beautiful Bill Act on July 4, 2025, made many of the provisions of the 2017 Tax Cut and Jobs Act permanent, including the 21% corporate tax rate, and the reinstatement of bonus depreciation, it also put in place modifications to reduce or limit certain fringe benefits and charitable contribution deductions and modified information reporting rules by requiring increased compliance processes by businesses. Pending the release of final regulations later in 2025, a full assessment of the impact of this legislation on the Company cannot yet be determined.

Comparison of the Six Months ended June 30, 2025 and 2024

Year-to-date highlights include:

Net income for the six months ended June 30, 2025 was $4.4 million, or $0.19 per share, an increase of $970,000, or 27.95%, from the $3.5 million or $0.15 per share reported for the same period in 2024.

Returns on average assets and equity of 1.02% and 12.37% for the first half of 2025, compared to 0.83% and 10.83% for the first six months of 2024, respectively;

For the six months ended June 30, 2025, net interest income totaled $15.8 million, an increase of $1.9 million, or 13.84%, as compared to the six months ended June 30, 2024. The net interest margin increased 34 bps to 3.78% as compared to 3.44% for the same period in 2024. Net interest income improved due to increased average earning assets, which increased $32.2 million, or 3.97%, to $844.7 million. In addition, the yield on earning assets improved 21 bps to 5.56% during the comparative six-month periods. Interest expense for the six months ended June 30, 2025, totaled $7.5 million, a decrease of $239,000, or 3.09%, from the same period in 2024. The decrease in interest expense is due primarily to borrowed funds as discussed above.

The following table shows the rates paid on earning assets and interest-bearing liabilities for the periods indicated:

Net Interest Margin Analysis

Average Balances, Income and Expense, and Yields and Rates

Six Months Ended June 30,


				2025							2024
				Average		Income/		Yields/		Average			Income/		Yields/
(Dollars are in thousands)				Balance		Expense		Rates		Balance			Expense		Rates
ASSETS
	Loans ^{(1) (2)}		$	670,488	$	20,452		6.15%	$	637,744		$	18,587		5.86%
	Federal funds sold			208		5		4.42%		116			3		5.38%
	Interest bearing deposits in other banks			62,681		1,355		4.36%		68,744			1,835		5.37%
	Investment securities ⁽²⁾			111,290		1,497		2.71%		105,824			1,199		2.27%
	Total earning assets			844,667		23,309		5.56%		812,428			21,624		5.35%
	Less: Allowance for credit losses			(7,873)						(7,436)
	Non-earning assets			37,157						39,062
		Total assets	$	873,951					$	844,054

LIABILITIES AND SHAREHOLDERS’ EQUITY
	Interest-bearing demand deposits		$	72,293	$	265		0.74%	$	73,113		$	297		0.82%
	Savings and money market deposits			190,952		1,610		1.70%		165,011			1,218		1.48%
	Time deposits			274,841		5,024		3.69%		267,779			5,143		3.86%
	Total interest-bearing deposits			538,086		6,899		2.59%		505,903			6,658		2.65%
	Other borrowings			10,028		177		3.51%		20,000			418		4.13%
	Trust preferred securities			12,085		409		6.73%		16,186			648		7.92%
	Total borrowed funds			22,113		586		5.27%		36,186			1,066		5.83%
	Total interest-bearing liabilities			560,199		7,485		2.69%		542,089			7,724		2.86%
	Non-interest-bearing deposits			231,690						228,042
	Other liabilities			9,631						9,521
		Total liabilities		801,520						779,652
	Shareholders’ equity			72,431						64,402
		Total liabilities and shareholders’ equity	$	873,951						844,054
	Net interest income				$	15,824						$	13,900
	Net interest margin						3.78%							3.44%
	Net interest spread						2.87%							2.49%
⁽¹⁾ Nonaccrual loans and loans held for sale have been included in average loan balances.
⁽²⁾ Tax exempt income is not significant and has been treated as fully taxable.

Net interest income is affected by changes in both average interest rates and average volumes (balances) of interest-earning assets and interest-bearing liabilities. The following table sets forth the amounts of the total changes in interest income and interest expense which can be attributed to rates and volume for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

Volume and Rate Analysis

Increase (decrease)

Six Months Ended June 30, 2025 Versus 2024

(Dollars in thousands)			Volume Effect		Rate Effect		Rate and Volume Effect		Change in Interest Income/ Expense
Interest income:
	Loans	$	952	$	918	$	(5)	$	1,865
	Federal funds sold		2		-		-		2
	Interest bearing deposits in other banks		(161)		(344)		25		(480)
	Investment securities		61		229		8		298
	Total earning assets		854		803		28		1,685

Interest expense:
	Interest-bearing demand deposits		(3)		(28)		(1)		(32)
	Savings and money market deposits		191		177		24		392
	Time deposits		135		(234)		(20)		(119)
	Other borrowings		(207)		(63)		29		(241)
	Trust preferred securities		(163)		(97)		21		(239)
	Total interest-bearing liabilities		(47)		(245)		53		(239)
	Change in net interest income	$	901	$	1,048	$	(25)	$	1,924

For the six months ended June 30, 2025, the provision for credit losses totaled $413,000 as compared to $429,000 recorded for the same period in 2024.

For the six months ended June 30, 2025 noninterest income decreased $4,000 to $4.8 compared to the same period in 2024, as combined decreases in service charges, card processing fees and financial services revenue totaling $139,000 were offset by a branded card incentive payment of $141,000.

For the six months ended June 30, 2025, noninterest expense totaled $14.5 million compared to $13.8 million for the same period in 2024, an increase of $670,000 or 4.85%. The components of the year-over-year increase are largely similar to those discussed for the current quarter. Additional items include $47,000 in costs incurred in “refreshing” a branch office and $42,000 in costs for snow and ice removal to keep our branch locations open and safe during the winter storms incurred during the first quarter of 2025.

Balance Sheet

Total assets as of June 30, 2025 were $892.9 million, an increase of $38.0 million, or 8.96% annualized, from $854.9 million as of December 31, 2024. Gross loans of $695.8 million as of June 30, 2025 reflected an increase of $38.3 million from $657.5 million as of December 31, 2024. Liquid assets in the form of cash and cash equivalents increased $4.5 million, or 13.38% annualized, during the first six months of 2025. Investment securities increased $765,000 during the first six months of 2025 due to purchases of $4.8 million and a decrease in the unrealized loss on available-for-sale securities of $2.1 million which more than offset maturities, payments and amortization of $6.1 million.

Gross loans receivable increased $38.3 million, or 11.74% annualized to $695.8 million as of June 30, 2025 from $657.5 million as of December 31, 2024. Commercial and residential real estate loans increased $7.3 million and $14.4 million, respectively, from December 31, 2024 to June 30, 2025. Consumer loans increased $3.0 million, which included the purchase of $2.8 million of individual loans during the six months ended June 30, 2025. Farmland and Agriculture loans increased $3.8 million and $1.2 million, respectively, during the first six months of 2025.

Deposits totaled $781.9 million as of June 30, 2025 compared to $750.0 million as of December 31, 2024. The increase of $31.9 million, or 8.58% annualized, was due to efforts to attract and retain time deposits and money market account relationships, including replacing a large, high-rate account with lower-cost brokered time deposits, combined with cyclical funds inflows. As a result of these efforts and seasonality, total time deposits increased $11.2 million, money market accounts increased $14.7 million, and noninterest bearing deposits increased $8.6 million during the first six months of 2025. The increase in time and money market deposits contributed to the decrease in our cost of interest-bearing deposits, which decreased 6 bps to 2.59% for the six months ended June 30, 2025, as compared to the same period in 2024, due to the relatively lower cost of money market deposit rates compared to time deposits, and the downward repricing of a portion of the time deposit portfolio as maturing deposits renew. During the second quarter of 2025, $15.0 million of brokered time deposits were added with maturities ranging from two months to two years. These deposits supplemented liquidity and supported loan closings and advances, and to bolster on balance sheet liquidity.

As of June 30, 2025, borrowed funds totaled $27.0 million, an increase of $2.0 million from December 31, 2024. On June 30, 2025, we took a short-term Federal Home Loan Bank advance of $5.0 million to bolster liquidity based on anticipated loan closings or advances. This advance was repaid in July. During the first quarter of 2025, a $3.0 million principal reduction was paid toward outstanding trust preferred securities. This repayment improved net interest income and the net interest margin during the current reporting periods and should positively impact future periods.

During the six months ended June 30, 2025, total shareholders’ equity increased $4.1 million to $74.8 million, due to net income of $4.4 million and a decrease in the net unrealized loss on available-for-sale securities of $1.7 million. These increases to capital were offset by dividends paid to shareholders of $1.9 million, and the repurchase of common stock totaling $106,000. Consequently, book value per share increased to $3.17 as of June 30, 2025, compared to $2.99 as of December 31, 2024. The Bank remains well capitalized per regulatory guidance.

As previously announced, the Board of Directors extended the repurchase of up to 500,000 shares of the Company’s common stock through March 31, 2026. During the first six months of 2025, the Company repurchased 35,846 shares at an average price of $2.98 per share. Since the commencement of the repurchase plan in 2022, 321,208 shares have been repurchased at an average price of $2.48 per share.

Asset Quality

The allowance for credit losses was $7.9 million, or 1.14% as a percentage of total loans, as of June 30, 2025, and $7.7 million, or 1.17%, as of December 31, 2024. The allowance for credit losses on unfunded commitments was $496,000 as of June 30, 2025, as compared to $404,000 at December 31, 2024. The increase in the allowance for credit losses on unfunded commitments was due to an increase in loan commitments, specifically residential and commercial real estate construction loan commitments.

Annualized net charge-offs (recoveries) as a percentage of average loans were 0.02% during the first six months of 2025 compared to (0.01)% during the same period of 2024 and 0.01% during the first quarter of 2025.

Nonperforming assets, which include nonaccrual loans, accruing loans past due 90 days or more, and other real estate owned, totaled $3.6 million as of June 30, 2025, an increase of $202,000, or 6.01%, since year-end 2024. Nonaccrual loans increased $215,000 during the first six months of 2025 due principally to a single loan relationship totaling $802,000 being placed in nonaccrual status. Nonperforming assets as a percentage of total assets were 0.40% as of June 30, 2025, and 0.39% as of December 31, 2024.

Other real estate owned decreased $30,000 to $57,000 as of June 30, 2025, compared to December 31, 2024, due to the sale of a property during the first quarter of 2025. Expenses associated with other real estate owned, including gains and losses on sales, were net recoveries of $3,000 for the three months ended June 30, 2025, compared to net recoveries of $32,000 during the three months ended June 30, 2024, due to gains on sales of foreclosed properties recorded of $6,000 and $34,000, during the respective three month periods in 2025 and 2024.

For detailed information on nonaccrual loans and other real estate owned as of June 30, 2025 and December 31, 2024, refer to Note 6 Loans and Note 10 Other Real Estate Owned in Item 1 of this Form 10-Q.

Loans rated substandard or below totaled $5.7 million as of June 30, 2025, an increase of $1.7 million from $4.0 million as of December 31, 2024, due to two loan relationships totaling $2.9 million that were downgraded during the first six months of 2025. The Company is working with one of these borrowers to bring the classified portion of the loan totaling $2.2 million into compliance with applicable loan covenants and does not anticipate any loss will result from this loan. Total past due loans decreased to $4.4 million as of June 30, 2025 from $6.2 million as of December 31, 2024.

The allowance for credit losses is maintained at a level that management deems appropriate to absorb any potential future losses and known impairments within the loan portfolio, whether or not the losses are actually ever realized.

Through our quarterly assessment, we continue to adjust the CECL model to best reflect the risks in the portfolio. However, future provisions may be deemed necessary. During the first six months of 2025, we maintained the adjustments to our qualitative factors initiated in 2024, to consider risk factors associated with commercial real estate and residential mortgage loans. Those changes, along with recoveries of loans previously charged off and the assessment of the historical and specific risks associated with the loan portfolio, resulted in a provision for credit losses of $413,000, of which $321,000 was a provision for the loan portfolio and $92,000 was a provision for unfunded commitments. The following table summarizes components of the allowance for credit losses and related loans as of June 30, 2025 and December 31, 2024:

Selected Credit Ratios
		June 30,		December 31,
(Dollars in thousands)		2025		2024
Allowance for credit losses - loans	$	7,948	$	7,684
Total loans		695,815		657,536
Allowance for credit losses to total loans		1.14%		1.17%
Nonaccrual loans	$	3,488	$	3,273
Nonaccrual loans to total loans		0.50%		0.50%

Ratio of allowance for credit losses loans to nonaccrual loans		2.28X		2.35X

Charge-offs net of recoveries	$	58	$	78
Average loans	$	670,488	$	641,022
Net charge-offs to average loans¹		0.02%		0.01%

¹- Annualized

Deferred Tax Asset and Income Taxes

Due to timing differences between the book and tax treatments of several income and expense items, a net deferred tax asset of $1.6 million is recorded as of June 30, 2025 and December 31, 2024, excluding the deferred tax asset on the unrealized loss on securities available-for-sale of $2.7 million and $3.2 million, as of June 30, 2025 and December 31, 2024, respectively. Our income tax expense was computed at the federal corporate income tax rate of 21% of taxable income and a blended state tax rate of 2.4%. We have no significant nontaxable income or nondeductible expenses.

Capital Resources

The Company meets the eligibility criteria to be classified as a small bank holding company in accordance with the Federal Reserve’s Small Bank Holding Company Policy Statement issued in February 2015 and is therefore not obligated to report consolidated regulatory capital. The Bank continues to be subject to various capital requirements administered by banking agencies.

The Bank’s capital ratios along with the minimum regulatory thresholds to be considered well-capitalized are presented in Note 4 in Item 1 of this Form 10-Q.

As of June 30, 2025, the Bank remains well capitalized under the regulatory framework for prompt corrective action. The ratios mentioned above for the Bank comply with the Federal Reserve rules to align with the Basel III Capital requirements.

Book value per common share was $3.17 and $2.99 as of June 30, 2025 and December 31, 2024, respectively. The increase in book value was due largely to a decrease in the unrealized loss on available for sale investment securities earnings for the year of $1.7 million combined with net earnings for the year of $4.4 million, which more than offset the dividend payment of $0.08 per share and the repurchase of common shares of $106,000 during the first half of 2025.

Other key performance indicators are as follows:

	Three months ended June 30,						Six months ended June 30,
	2025			2024			2025			2024
Return on average assets¹		1.15	%		0.79	%		1.02	%		0.83	%
Return on average shareholders’ equity¹		13.91	%		10.56	%		12.37	%		10.83	%
Average equity to average assets		8.27	%		7.51	%		8.29	%		7.63	%

¹- Annualized

Under current economic conditions, we believe it is prudent to continue to retain capital sufficient to support planned asset growth while being able to absorb potential losses that may occur if asset quality deteriorates, and based upon projections, we believe our current capital levels will be sufficient.

During the first quarter of 2025, the Company paid a cash dividend of $0.08 per common share to our shareholders. Future payments of cash dividends will depend on a number of factors including but not limited to maintaining positive retained earnings, compliance with regulatory rules governing the payment of dividends, strategic plans, and sufficient capital at the Bank to allow payment of dividends to the Company.

On April 28, 2022, the board of directors of the Company authorized the repurchase of up to 500,000 shares of the Company’s outstanding common stock. As previously reported, this plan was extended by the Board of Directors through March 31, 2026. The actual means and timing of any purchases, number of shares and prices or range of prices will be determined by the Company in its discretion and will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements. As of June 30, 2025, the Company has repurchased 321,208 shares at an average price of $2.48 per share since inception of the plan. During the quarter ended June 30, 2025, the Company repurchased 13,069 shares at an average price of $2.95 per share. There is no assurance that the Company will purchase any additional shares under this program.

Liquidity

We closely monitor our liquidity and our liquid assets in the form of cash, due from banks, federal funds sold and unpledged available-for-sale investments. Collectively, those balances were $133.4 million as of June 30, 2025, up from $128.5 million as of December 31, 2024. The increase is primarily due to deposit growth, including brokered certificates of deposit and the short-term FHLB advance taken during June 2025. A surplus of short-term assets is maintained at levels management deems adequate to meet potential liquidity needs

As of June 30, 2025, all of our investments are classified as available-for-sale, providing an additional source of liquidity in the amount of $61.3 million, which is net of the $35.5 million of securities pledged as collateral. Generally, the investment portfolio serves as a source of liquidity while yielding a higher return at the purchase date when compared to other short-term investment options, such as federal funds sold and overnight deposits with the Federal Reserve Bank of Richmond (the FRB). Due to the unrealized loss on securities available-for-sale, the sale of investments, other than shorter-term investments with minimal unrealized losses or more recently purchased investments, would not be a main source of liquidity at this time due to the immediate impact on regulatory capital; however, the majority of the portfolio is considered high credit quality investments and would be available to pledge against borrowed funds. Total investment securities increased $765,000, or 1.61%, annualized during the first half of 2025 from $96.0 million as of December 31, 2024 to $96.7 million as of June 30, 2025. The Bank also has additional borrowing capacity on lines for which investments and certain loans are currently pledged.

Our loan to deposit ratio was 88.99% and 87.67% as of June 30, 2025 and December 31, 2024, respectively.

Available third-party sources of liquidity as of June 30, 2025 include the following: a line of credit with the FHLB, access to brokered certificates of deposit markets and the discount window at the Federal Reserve Bank. We also have the ability to borrow $30.0 million in unsecured federal funds through credit facilities extended by correspondent banks.

We have used our line of credit with the FHLB to issue letters of credit totaling $14.0 million to the Treasury Board of Virginia for collateral on public funds. No draws on these letters of credit have been issued. The letters of credit are considered to be draws on our FHLB line of credit. In May 2023, we borrowed $10.0 million from the FHLB, through a fixed rate 5-year advance, to support loan fundings and other general liquidity needs; and in June 2025 we borrowed an additional $5.0 million which was repaid in July 2025. An additional $191.3 million was available as of June 30, 2025 on the $220.3 million line of credit. Full use of the FHLB borrowing capacity would require the Company to pledge additional assets.

As of June 30, 2025 we held brokered time deposits of $18.0 million, an increase of $15.0 million from December 31, 2024. These added brokered deposits supplemented liquidity and supported loan closings and advances and bolstered on-balance-sheet liquidity. Internet accounts are limited to customers located in our primary market area and the surrounding geographical area. The average balance of and the rate paid on deposits is shown in the net interest margin analysis tables. Total reciprocal Certificate of Deposit Registry Services (“CDARS”) time deposits were $7.6 million and $7.0 million as of June 30, 2025 and December 31, 2024, respectively. Aside from the availability of CDARS time deposits, we also offer a similar deposit product for transaction account customers through Intrafi Cash Service (“ICS”). As of June 30, 2025 approximately $17.9 million were placed in this product as compared to $23.7 million at December 31, 2024. Both the CDARS and ICS offerings assist us in maintaining deposit relationships, while assuring the depositors’ funds retain federal deposit insurance coverage.

Additional liquidity is available through the Federal Reserve Bank discount window for overnight funding needs. We may collateralize this line with investment securities and loans at our discretion; however, while we do not anticipate using this as a primary funding source, securities with an estimated market value of $28.2 million were pledged as of June 30, 2025.

Time deposits of $250,000 or more were approximately 5.52% of total deposits at June 30, 2025 and 6.84% of total deposits at December 31, 2024.

In January 2025, we made a voluntary principal payment of $3.0 million on an outstanding trust preferred security. We may consider making future principal payments based on our available liquidity and considering other funding opportunities that may be available.

With the on-balance sheet liquidity and other external sources of funding, we believe the Bank has adequate liquidity and capital resources to meet our requirements and needs for the foreseeable future. However, liquidity can be further affected by a number of factors such as counterparty willingness or ability to extend credit, regulatory actions and customer preferences, some of which are beyond our control. With the current economic uncertainty resulting from inflation, the impact of proposed tariffs and the wars in Ukraine and Gaza, we continue monitoring our liquidity position, specifically cash on hand in order to meet customer demands. Additionally, our contingency funding plan is reviewed quarterly with our Asset Liability Committee.

Off Balance Sheet Items and Contractual Obligations

There have been no material changes during the six months ended June 30, 2025, to the off-balance sheet items and the contractual obligations disclosed in our 2024 Form 10-K.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4.

Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer (our CEO) and our Executive Vice President and Chief Financial Officer (our CFO), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were operating effectively in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2025, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Part II Other Information

Item 1.

Legal Proceedings

In the course of operations, we may become a party to legal proceedings in the normal course of business. At June 30, 2025, we do not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or any of its subsidiaries or to which the property of the Company or any of its subsidiaries is subject, in the opinion of management, will materially impact the financial condition or liquidity of the Company.

Item 1A.

Risk Factors

Not Applicable.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

(a)

Sales of Unregistered Securities – None

(b)

Use of Proceeds – Not Applicable

(c)

Issuer Purchases of Securities

Stock Repurchase Program

The Company has an approved one-year stock repurchase program that authorizes the repurchase of up to 500,000 of the Company’s common shares that was extended through March 31, 2026. Repurchases may be made through open market purchases or in privately negotiated transactions. Shares repurchased will be returned to the status of authorized and unissued shares of common stock. The actual means and timing of any purchases, number of shares and prices or range of prices will be determined by the Company.

Shares of the Company’s common stock were repurchased during the three months ended June 30, 2025, as detailed below. Under the terms of the stock repurchase program, the Company has the remaining authority to repurchase up to 178,792 shares of common stock.

Period Beginning on First Day of Month Ended		Total Number of Shares Purchased		Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs
April 30, 2025		3,117	$	2.86	3,117	188,744
May 31, 2025		5,484	$	2.95	5,484	183,260
June 30, 2025		4,468	$	3.00	4,468	178,792
	Total	13,069	$	2.95	13,069

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not Applicable.

Item 5.

Other Information

Trading Arrangements – During the three months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

Item 6.

Exhibits

The following exhibits are filed as part of this report or are incorporated by reference:

No.	Description
3.1	Amended Articles of Incorporation of New Peoples Bankshares, Inc. (incorporated by reference to Exhibit 3.1 to Form 10-Q for the quarterly period ended June 30, 2008 filed on August 11, 2008).
3.2	Bylaws of New Peoples Bankshares, Inc. (incorporated by reference to Exhibit 3.2 to Form 8-K filed on August 26, 2020).
4.1	Specimen Common Stock Certificate of New Peoples Bankshares, Inc. (incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012).
4.2	Description of New Peoples Bankshares, Inc.’s Securities (incorporated by reference to Exhibit 4.2 to Form 10-K for the year ended December 31, 2024, filed on March 31, 2025).
10.1*	Employment Agreement dated June 25, 2025 between New Peoples Bankshares, Inc., New Peoples Bank, Inc. and James W. Kiser (incorporated by reference to Form 8-K filed June 30, 2025)
31.1	Certification by Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.
31.2	Certification by Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.
32	Certification by Chief Executive Officer and Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials for the Company’s Form 10-Q for the quarterly period ended June 30, 2025, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements, tagged as blocks of text.

* Denotes management contract

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			NEW PEOPLES BANKSHARES, INC.
			(Registrant)

	By:		/s/ JAMES W. KISER
			James W. Kiser
			President and Chief Executive Officer

	Date:		August 14, 2025

	By:		/s/ CHRISTOPHER G. SPEAKS
			Christopher G. Speaks
			Executive Vice President and Chief Financial Officer

	Date:		August 14, 2025