Sign in

You're signed outSign in or to get full access.

NP

NEW PEOPLES BANKSHARES INC (NWPP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was another solid execution quarter: net income rose 30.8% year over year to $2.76M ($0.12/share) on 50 bps net interest margin expansion to 3.93%, and 20% growth in net interest income to $8.64M .
  • Sequentially, EPS rose to $0.12 from $0.11 as NIM improved to 3.93% from 3.86%, with operating leverage reflected in a lower efficiency ratio (66.24% vs 67.70%) .
  • Management attributed NIM expansion to higher earning asset yields and lower funding costs after BTFP and trust preferred reductions; deposit mix and repricing also helped lower interest expense .
  • Asset quality remained sound: ACL/loans was 1.13%, NPAs/Assets improved to 0.35%, and nonaccruals fell vs year-end, despite a targeted $138K residential charge-off related to prior disaster deferrals .
  • No Street consensus EPS was available; company press release highlighted $2.8M net income and $0.12 EPS for Q3 2025 (consistent with 10-Q). Catalysts: continued NIM tailwinds from lower funding costs, sustained loan growth, and stable credit metrics .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded 50 bps YoY to 3.93% as the yield on earning assets rose and the cost of funds fell; net interest income grew 20% YoY to $8.64M (“The net interest margin increased 50 bps to 3.93% … due to the increase in the yield on earning assets and the decline in the cost of funds.”) .
  • Loan growth remained healthy: gross loans reached $707.3M (+$49.7M YTD; +10.11% annualized), supporting revenue momentum .
  • Efficiency improved: the efficiency ratio fell to 66.24% vs 71.10% a year ago on higher NII and cost discipline .

What Went Wrong

  • Noninterest expense increased 8% YoY to $7.38M on core conversion costs, higher salaries/benefits, and loan-related promotional expenses, tempering operating leverage .
  • Classified loans increased vs year-end due to two downgrades totaling $2.9M YTD, though management does not anticipate loss on the larger relationship; monitoring remains elevated .
  • Credit costs ticked up QoQ ($189K provision vs $154K), and the quarter included a $138K charge-off on a residential loan tied to natural disaster deferrals .

Financial Results

Headline Metrics (oldest → newest)

MetricQ3 2024Q2 2025Q3 2025
Net Income ($M)$2.11 $2.53 $2.76
Diluted EPS ($)$0.09 $0.11 $0.12
Net Interest Income ($M)$7.18 $8.21 $8.64
Net Interest Margin (%)3.43% 3.86% 3.93%
Noninterest Income ($M)$2.43 $2.44 $2.50
Noninterest Expense ($M)$6.83 $7.21 $7.38
ROA (%)0.97% 1.15% 1.21%
ROE (%)12.35% 13.91% 14.28%
Efficiency Ratio (%)71.10% 67.70% 66.24%

Income Statement Drivers (oldest → newest)

Metric ($M)Q3 2024Q2 2025Q3 2025
Interest & Dividend Income$11.55 $11.96 $12.61
Interest Expense$4.37 $3.74 $3.97
Provision for Credit Losses$0.05 $0.15 $0.19
Pre‑Tax Income$2.73 $3.28 $3.57

Balance Sheet & Credit KPIs (period-end; oldest → newest)

KPIDec 31, 2024Jun 30, 2025Sep 30, 2025
Total Assets ($M)$854.93 $892.93 $910.72
Gross Loans ($M)$657.54 $695.82 $707.27
Total Deposits ($M)$749.98 $781.91 $799.38
Borrowed Funds ($M)$24.99 $26.99 $21.99
ACL / Loans (%)1.17% 1.14% 1.13%
NPAs / Assets (%)0.39% 0.40% 0.35%
Nonaccrual Loans / Loans (%)0.50% 0.50% 0.42%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash Dividend per ShareFY 2025$0.08 declared Feb 25, 2025 (paid Mar 31, 2025) No new dividend announced in Q3 materials Maintained (no update)
Stock Repurchase ProgramThrough Mar 31, 2026Authorization extended; ongoing Remaining authority 155,107 shares at Sep 30, 2025 Maintained (active)

Earnings Call Themes & Trends

Note: No public earnings call transcript was found; themes reflect management’s 10‑Q commentary and company press releases -.

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
NIM & Funding CostsQ2 NIM 3.86%; cost of funds fell on BTFP repayment and trust preferred reductions; deposit mix shift to lower‑cost MMAs .NIM 3.93% as asset yields rose and cost of funds declined further; time deposits repriced lower .Improving NIM; funding costs easing.
Loan GrowthLoans +$38.3M YTD at 6/30; diversified across residential, commercial, consumer .Loans +$49.7M YTD at 9/30; strength in resi, multifamily, farmland .Sustained growth momentum.
lattAsset QualityNPAs/Assets 0.40%; substandard loans increased $1.7M due to two downgrades; monitoring ongoing .NPAs/Assets improved to 0.35%; partial $138K charged‑off on disaster‑affected resi loan; nonaccrual ratio down to 0.42% .
Liquidity & DepositsAdded $15M brokered CDs in Q2 to support loan funding; $10M matured in Aug and not replaced .Brokered CDs outstanding $8.0M; continued emphasis on MMAs and time deposits; L/D ~88.5% .Brokered usage moderated; balanced funding.
Technology/Core ConversionIncremental costs in Q2; more expected in 2H’25 .Additional post‑quarter costs expected for installation, testing, training .Execution phase with near‑term expense drag.
Tax/Regulatory“One Big Beautiful Bill Act” note; awaiting regs .Same; limited near‑term impact disclosed .Monitoring; neutral near‑term.

Management Commentary

  • “The net interest margin increased 50 bps to 3.93% for the quarter ending September 30, 2025 as compared to 3.43% for the same period in 2024 due to the increase in the yield on earning assets and the decline in the cost of funds.”
  • “Subsequent to quarter-end, there has been, and will be, additional costs associated with the core system conversion including additional costs related to overtime, meals and other expenses related to the installation, testing and training on the new system and the other ancillary systems impacted by the core conversion.”
  • “Deposits totaled $799.4 million as of September 30, 2025… due to efforts to attract and retain time deposits and money market account relationships… combined with cyclical funds inflows.”

Q&A Highlights

  • No public earnings call transcript was identified; the analysis relies on the 10‑Q and company press releases for management commentary and clarifications .

Estimates Context

  • S&P Global consensus: No EPS or revenue consensus figures available for Q3 2025; small‑cap OTC coverage appears limited.*
  • Actual Q3 2025 results: EPS $0.12, Net income $2.76M (company press release and 10‑Q) .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion appears durable near term as deposit costs ease and higher‑yielding assets reprice into the book; every 10 bps of NIM carries meaningful earnings leverage at current scale .
  • Loan growth remains healthy and diversified (notably residential and multifamily), supporting NII growth; watch concentration and underwriting as growth persists .
  • Credit quality is stable with improving NPAs/Assets (0.35%); targeted charge‑offs tied to disaster deferrals indicate proactive clean‑up rather than systemic deterioration .
  • Operating efficiency improved (66.24%), though core conversion expenses will intermittently pressure noninterest expense through implementation .
  • Liquidity and funding are balanced; brokered deposits moderated to $8.0M, and L/D is manageable (~88.5%)—reducing sensitivity to funding shocks .
  • Capital remains strong (well‑capitalized bank), enabling continued measured loan growth, dividends (historically), and opportunistic buybacks within authorization .
  • Near‑term stock drivers: continued NIM resilience, sustained loan growth, and benign credit trends; any surprise uptick in core conversion costs or credit downgrades would be watch items .

Appendix: Prior Quarter Press Releases (for trend)

  • Q2 2025: Net income $2.5M; $0.11 EPS (press release) .
  • Q1 2025: Net income $1.9M; $0.08 EPS (press release) .
  • Q3 2025: Net income $2.8M; $0.12 EPS (press release; consistent with 10‑Q) .