S-1

As filed with the Securities and Exchange Commission on March 29, 2012

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

New Peoples Bankshares, Inc.

(Exact name of registrant as specified in its charter)

Virginia	6022	31-1804543
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

67 Commerce Drive

Honaker, Virginia 24260

Telephone: (276) 873-7000

(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices)

Jonathan H. Mullins

President and Chief Executive Officer

New Peoples Bankshares, Inc.

67 Commerce Drive

Honaker, Virginia 24260

Telephone: (276) 873-7000

(Name, address, including zip code and telephone number, including area code, of agent for service)

Copies to:

C. Todd Asbury Executive Vice President and Chief Financial Officer New Peoples Bankshares, Inc. 67 Commerce Drive Honaker, Virginia 24260 Telephone: (276) 873-7000 Douglas W. Densmore, Esq. LeClairRyan 10 S. Jefferson Street Wells Fargo Tower, Suite 1800 Roanoke, Virginia 24011 Telephone: (540) 510-3024 Fax: (540) 510-3050

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:    ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to Be Registered	Amount to be Registered	Proposed Maximum Aggregate Offering Price Per Share	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Common Stock, par value $2.00 per share (1)(4)	20,300,000	$1.50	$30,450,000	$3,490
Subscription Rights to Purchase Shares of Common Stock (2)
Warrants (3)
Shares of Common Stock underlying the Warrants (4)	4,060,000	$1.75	$7,105,000	$814
Total (5)			$37,555,000	$4,304

(1) This registration statement relates to (a) shares of our common stock, including shares received by two directors upon conversion of their loans to the Company into common stock; (b) subscription rights to purchase shares of our common stock for shareholders of record on [record date, 2012]; (c) Warrants deliverable upon the purchase of every five shares of common stock, including the conversion of the director loans to common stock; and (d) shares of our common stock underlying the Warrants.

(2) The subscription rights are being issued without consideration. Pursuant to Rule 457(g), no separate registration fee is payable with respect to these subscription rights because the subscription rights are registered in the same registration statement as the common stock to be offered pursuant thereto.

(3) The Warrants are being issued without consideration. Pursuant to Rule 457(g) no separate registration fee is payable with respect to these Warrants because the Warrants are being registered in the same registration statement as the common stock to be offered pursuant thereto.

(4) Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum offering price.

(5) Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum offering price.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Subject to completion, dated March 29, 2012

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

Up to $25,000,000.50 of Common Stock at a Subscription Price of $1.50 per share

For every five Shares purchased, one non-transferable warrant granted to purchase one share of Common Stock

We are conducting a rights offering and an offering of common stock to the public on a best efforts basis at a price of [$1.50] per share. We are distributing, at no charge, to holders of our common stock, non-transferable subscription rights to purchase up to 16,666,667 shares ($25,000,000.50) of our common stock. In the rights offering, you will receive one subscription right for each share you own as of 5:00 p.m. Eastern Time on [record date, 2012]. The subscription rights will not be listed for trading on any stock exchange or trading market. As of the close of business on [record date, 2012], there were [10,010,178] shares of our common stock issued and outstanding. We must sell a minimum of 6,666,667 shares ($10,000,000.50) in the rights offering and the public offering, if any, to complete the rights offering. We refer to the sale of 6,666,667 shares or $10,000,000.50 as the minimum of the offering range (the “Minimum Offering Amount”), and the sale of 16,666,667 shares or $25,000,000.50 as the maximum of the offering range (the “Maximum Offering Amount”).

Each subscription right will entitle you to purchase 1.665 shares of our common stock at a subscription price of $1.50 per share, (the “Basic Subscription Privilege”). If you fully exercise your Basic Subscription Privilege and other shareholders do not fully exercise their Basic Subscription Privilege, you will be entitled to exercise an over-subscription privilege (the “Over-Subscription Privilege”), subject to certain limitations and subject to allotment, to purchase a portion of the unsubscribed shares of our common stock at the same subscription price of $1.50 per share. The rights offering will expire at 5:00 p.m. Eastern Time on [June 15,] 2012. We reserve the right to extend the expiration date one or more times, but in no event will we extend the rights offering beyond [August 15,] 2012.

Subscriptions are irrevocable and may not be cancelled or modified.

We may offer any shares of common stock that remain unsubscribed for (after taking into account all Over-Subscription Privileges exercised) at the expiration of the rights offering to the public at $1.50 per share. The public offering will be conducted on a best efforts basis and shall terminate on [September 15,] 2012, unless extended, but not later than [December 31,] 2012. Members of our Board of Directors have already committed to purchase $1,000,000.50 million or 666,667 shares in the offering.

For each five shares purchased in the rights offering or public offering, purchasers will receive, without charge, one warrant to purchase one share of our common stock at a purchase price of $1.75 per share. The warrant will be exercisable for a period of five years from the date the warrants are issued and may be exercised only by payments in the form described herein, and will be non-transferable with no fractional warrants issued. The warrants are not attached to the shares being offered in this offering; if a purchaser subsequently transfers shares in this offering, the purchaser will retain any related warrants. The warrants will not be listed for trading on any stock exchange or market.

In addition to this offering, we will be issuing 3,633,333 shares of our common stock to two of our directors pursuant to the conversion into equity of loans previously extended by them to us in the total principal amount of $5.45 million, plus an undetermined number of additional shares for accrued interest (the “Conversion Shares”). These unsecured loans will be converted to common stock at the conversion price of $1.50 per share and the Conversion Shares will be issued regardless of whether we meet the minimum amount of subscriptions to complete the rights offering and the public offering and will not be counted towards the Minimum Offering Amount. The directors who receive the Conversion Shares will be issued warrants on the same terms and conditions as those issued to purchasers in the rights offering and public offering.

OUR BOARD OF DIRECTORS IS NOT MAKING A RECOMMENDATION REGARDING YOUR EXERCISE OF THE SUBSCRIPTION RIGHTS. You should carefully consider whether to exercise your subscription rights prior to the expiration of the rights offering.

INVESTING IN OUR COMMON STOCK INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. YOU SHOULD READ CAREFULLY THE “RISK FACTORS” SECTION BEGINNING ON PAGE 16 OF THIS PROSPECTUS.

We reserve the right to cancel the rights offering and any public offering at any time. In the event that the rights offering and/or any public offering is cancelled, all subscription payments received by the subscription/escrow agent for subscriptions that have not been accepted will be returned as soon as practicable, without interest, and no shares other than shares previously issued or to be issued in connection with accepted subscriptions, if any, and the Conversion Shares will be issued.

Our common stock is quoted on the OTC Bulletin Board Pink Sheets under the symbol “NWPP.” The last reported sales price of our common stock reported on                     , 2012 was [$3.00] per share.

Neither the Securities and Exchange Commission nor any state or other securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The shares of our common stock are not deposits or other obligations of any bank or savings association and are not insured or guaranteed by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund or any other governmental entity.

	Minimum Offering Amount				Maximum Offering Amount
	Per Share		Total		Per Share		Total
Offering price per share	$	1.50	$	10,000,000.50	$	1.50	$	25,000,000.50
Proceeds to us (1)	$	1.50	$	10,000,000.50	$	1.50	$	25,000,000.50

⁽¹⁾  Before deducting offering expenses payable by us estimated to be approximately $300,000.

We anticipate that shares purchased in this offering and related warrants will be delivered to purchasers from time to time as we direct once we have received subscriptions for the Minimum Offering Amount (but in any event not prior to the expiration of the rights offering).

The date of this prospectus is                     2012.

Virginia Locations Honaker (HQ) 53 Commerce Drive Honaker, VA 24260 Abingdon 350 West Main Street Abingdon, VA 24210 Big Stone Gap 419 Shawnee Avenue, East Big Stone Gap, VA 24219 Bland 427 Main Street Bland, VA 24315 Bluefield 514 Commerce Drive Bluefield, VA 24605 Bristol-Commonwealth 75 Commonwealth Avenue Bristol, VA 24201 Bristol-Linden Square 101 Linden Square Drive Bristol, VA 24202
Castlewood 87 Miners Drive Castlewood, VA 24224 Chilhowie 155 East Lee Highway Chilhowie, VA 24319 Clintwood 198 Colley Shopping Center Clintwood, VA 24228 Gate City 663 East Jackson Street Gate City, VA 24251 Grundy 20445 Riverside Drive Grundy, VA 24614 Haysi 111 Haysi Main Haysi, VA 24256 Jonesville 108 Fisher Road Jonesville, VA 24263 Lebanon 1421 East Main Street Lebanon, VA 24266	Norton 600 Trent Street, Northeast Norton, VA 24273 Pennington Gap 42311 East Morgan Avenue Pennington Gap, VA 24277 Pound 11241 Indian Creek Road Pound, VA 24279 Pounding Mill 12602 Gov. G.C. Perry Highway Pounding Mill, VA 24637 Richlands 2302 Second Street Richlands, VA 24641 Tazewell 157 Tazewell Mall Circle Tazewell, VA 24651 Weber City 1299 US Highway 23 South Weber City, VA 24290 Wise 5448 Wise-Norton Road Wise, VA 24293	West Virginia Locations Bluewell 996 Coal Heritage Road Bluewell, WV 24701 Princeton 1221 Stafford Drive Princeton, WV 24740 Tennessee Locations Jonesborough 372 East Jackson Boulevard Jonesborough, TN 37659 Kingsport 2600 North John B Dennis Highway Kingsport, TN 37660

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	1
QUESTIONS AND ANSWERS RELATING TO THE OFFERING	1
PROSPECTUS SUMMARY	10
RISK FACTORS	16
SELECTED CONSOLIDATED FINANCIAL INFORMATION	29
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	30
USE OF PROCEEDS	31
DETERMINATION OF SUBSCRIPTION PRICE	31
MARKET FOR COMMON STOCK AND DIVIDEND INFORMATION	33
CAPITALIZATION	34
THE OFFERING	35
PLAN OF DISTRIBUTION	46
DESCRIPTION OF COMMON STOCK AND WARRANTS	47
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES	52
EXPERTS AND CHANGE IN ACCOUNTANTS	55
LEGAL MATTERS	55
WHERE YOU CAN FIND MORE INFORMATION	55
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	55

i

ABOUT THIS PROSPECTUS

You should rely only on the information contained in or incorporated by reference into this prospectus. Please see “Incorporation by Reference.” We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. We are not making an offer to sell the securities in any jurisdiction where the offer or sale is not permitted or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. The information that appears in or is incorporated by reference into this prospectus may only be accurate or complete as of the date of this prospectus or the date of the document in which incorporated information appears. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.

It is important for you to read and consider all of the information contained in or incorporated by reference into this prospectus before making your investment decision to purchase shares of our common stock in this offering. Neither we, nor any of our officers, directors, agents or representatives make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus to be advice of any kind. You should consult with your own advisors for advice about the suitability of this investment or other legal, tax, business, or financial questions that you should consider before investing in our common stock.

We use industry forecasts and projections and market data throughout this prospectus, including data from publicly available information and industry publications. These forecasts and projections, which may not be achieved, are based upon surveys and market research and the preparers’ experience in the industry. We believe that the surveys and market research others have performed are reliable, but we have not independently investigated or verified this information.

Unless the context requires otherwise or unless otherwise noted:

• all references to “New Peoples Bankshares,” “the company,” “our company,” “we,” “our” or “us” are to New Peoples Bankshares, Inc. and its wholly-owned subsidiary, New Peoples Bank, collectively.

• all references to the “Bank” are to New Peoples Bank, a wholly-owned subsidiary of New Peoples Bankshares.

• all references to “eligible shareholder(s)” are to our shareholders of record at 5.00 p.m. Eastern Time on                     2012.

• all references to “the offering” and “this offering” are to the rights offering and public offering together in general.

QUESTIONS AND ANSWERS RELATING TO THE OFFERING

Below are answers to what we anticipate will be common questions about the rights offering and the public offering. The answers are based on selected information included elsewhere in this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that you may have about the rights offering and the public offering. This prospectus and the documents incorporated by reference into this prospectus contain more detailed descriptions of the terms and conditions of the rights offering and the public offering and provide additional information about us and our business, including potential risks related to the rights offering and the public offering, the shares of our common stock offered hereby and our business.

What is the rights offering?

We are distributing, at no charge, to holders of shares of our common stock as of 5:00 p.m. Eastern Time on                     , 2012, the record date, non-transferable subscription rights to purchase shares of our common stock at a price of $1.50 per whole share. You will receive one subscription right for each share you own as of the record date above. Each subscription right entitles the holder to a Basic Subscription Privilege and an Over-Subscription Privilege, which are described below.

Why are we conducting the offering?

We are conducting the offering to increase our equity capital and improve our capital ratios to strengthen our balance sheet as we continue to resolve and manage our elevated levels of nonperforming assets. Our capital position has been impacted by increases in our provision for loan losses and write downs of our other real estate owned portfolio due to the economic downturn and deteriorating real estate market conditions. As a result, we have reported a cumulative net loss of $21.7 million over the three years ended December 31, 2011. All of our capital

1

ratios currently meet the minimum regulatory capital requirements necessary for us to be considered a “well capitalized” financial institution, although our regulators encourage higher levels. Capitalization of any company is of critical importance, especially during difficult times. We believe that capital requirements may increase in the future due to financial reform legislation. In addition, we are currently operating under a written agreement (the “Formal Agreement”) with the Board of Governors of the Federal Reserve System (“Federal Reserve”), through the Federal Reserve Bank of Richmond (“Federal Reserve Bank”), and the Virginia State Corporation Commission Bureau of Financial Institutions (the “Virginia Bureau”). We believe we have made progress in our compliance efforts under the Formal Agreement, and we believe all of the written plans required to date, as discussed in the following paragraph, have been submitted on a timely basis.

Under the terms of the Formal Agreement, the Bank agreed to develop and submit for approval within specified time periods written plans addressing a number of operational and managerial aspects of the Bank and maintenance of sufficient capital at New Peoples Bankshares, on a consolidated basis, and the Bank, on a stand-alone basis. For more details, please see “Prospectus Summary - Supervisory Actions.” We expect to use the proceeds of this offering to increase the Bank’s equity capital, to serve as a buffer for any possible future degradation in the Bank’s loan or asset portfolios, and for general corporate uses. See “Use of Proceeds.”

Our board of directors has chosen to include a rights offering as part of the offering to allow existing shareholders the opportunity to purchase additional shares of our common stock based on their pro rata ownership percentage, while giving existing shareholders the opportunity to limit their ownership dilution from a sale of common stock to other shareholders or other investors in the public offering and the issuance of the Conversion Shares.

What is the Basic Subscription Privilege?

The Basic Subscription Privilege gives our eligible shareholders the opportunity to purchase before the public offering 16,666,667 shares of our common stock at a subscription price of $1.50 per share. For every share you owned as of the record date, your Basic Subscription Privilege allows you to purchase 1.665 shares of common stock. For example, if you owned 100 shares of common stock as of the record date, you would have the right to purchase 166 shares of our common stock in the rights offering for $1.50 per share (or a total payment of $249). You may exercise all or a portion of your Basic Subscription Privilege, or you may choose not to exercise any subscription rights at all. If you exercise less than all of your Basic Subscription Privilege, you will not be entitled to purchase additional shares under your Over-Subscription Privilege. See “The Offering – The Rights Offering – Basic Subscription Privilege.”

Fractional shares resulting from the exercise of Basic Subscription Privileges will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the subscription agent in the rights offering will be returned as soon as practicable, without interest or penalty, after the rights offering expires.

If you hold a New Peoples Bankshares, Inc. stock certificate, the number of shares you may purchase pursuant to your Basic Subscription Privilege is indicated on the enclosed rights certificate. If you hold your shares in the name of a broker, dealer, custodian bank or other nominee (a “nominee record holder”) who uses the services of the Depository Trust Company (“DTC”), you will not receive a rights certificate. Instead, DTC will issue one Basic Subscription Privilege to your nominee record holder on your behalf for every share of our common stock that you own as of the record date. Your nominee record holder should contact you regarding the number of shares you may purchase pursuant to your Basic Subscription Privilege. If you are not contacted by your nominee record holder, you should contact your nominee as soon as possible. See “The Offering – The Rights Offering – How to Exercise Subscription Rights.”

What is the Over-Subscription Privilege?

If you purchase all of the shares available to you pursuant to your Basic Subscription Privilege, you may also choose to purchase a portion of any shares that our other shareholders do not purchase through the exercise of their Basic Subscription Privilege. You should indicate on your rights certificate, or the form provided by your nominee if your shares are held in the name of a nominee record holder, how many additional shares you would like to purchase pursuant to your Over-Subscription Privilege.

We can provide no assurances that you will actually be entitled to purchase the number of shares issuable upon the exercise of your Over-Subscription Privilege in full at the expiration of the rights offering. We will not be able to satisfy any orders for shares pursuant to the Over-Subscription Privilege if all of our shareholders exercise their Basic Subscription Privileges in full, and we will only honor an Over-Subscription Privilege to the extent sufficient shares are available following the exercise of Basic Subscription Privileges.

2

To the extent the aggregate subscription price of the actual number of unsubscribed shares available to you pursuant to the Over-Subscription Privilege is less than the amount you actually paid in connection with the exercise of the Over-Subscription Privilege, you will be allocated only the number of unsubscribed shares available to you, and any excess subscription payments will be returned to you, without interest or penalty, as soon as practicable.

To the extent the amount you actually paid in connection with the exercise of the Over-Subscription Privilege is less than the aggregate subscription price of the maximum number of unsubscribed shares available to you pursuant to the Over-Subscription Privilege, you will be allocated the number of unsubscribed shares for which you actually paid in connection with the Over-Subscription Privilege.

For example, if (i) there are 100 excess shares available for purchase by three shareholders who have each timely, validly, and fully exercised their Basic Subscription Privileges and (ii) shareholder A requests an additional 100 shares pursuant to shareholder A’s Over-Subscription Privilege, shareholder B requests an additional 70 shares pursuant to shareholder B’s Over-Subscription Privilege, and shareholder C requests an additional 30 shares pursuant to shareholder C’s Over-Subscription Privilege, twice as many excess shares have been requested pursuant to Over-Subscription Privileges as are available, resulting in a pro rata allocation of 50% of each request. In this example, assuming (x) timely and valid exercise of the Over-Subscription Privileges, (y) timely receipt of sufficient payment for the excess shares requested pursuant to such Over-Subscription Privileges, and (z) that the beneficial ownership limitation described below is not applicable, the pro rata allocation would be as follows:

• Shareholder A would receive 50 excess shares pursuant to the Over-Subscription Privilege;

• Shareholder B would receive 35 excess shares pursuant to the Over-Subscription Privilege; and

• Shareholder C would receive 15 excess shares pursuant to the Over-Subscription Privilege.

To properly exercise your Over-Subscription Privilege, you must deliver to the subscription agent the subscription payment related to your Over-Subscription Privilege before the rights offering expires. If you send payment by personal check, payment will not be deemed to have been delivered to the subscription agent until the check has cleared, which may take several days. Because we will not know the total number of unsubscribed shares before the rights offering expires, if you wish to maximize the number of shares you purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares that may be available to you (i.e., the aggregate payment for both your Basic Subscription Privileges and for any additional shares you desire to purchase pursuant to your Over-Subscription Privilege). See “The Offering – The Rights Offering – Over-Subscription Privilege.”

Fractional shares resulting from the exercise of the Over-Subscription Privilege will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the subscription agent will be returned as soon as practicable, without interest or penalty.

Is an eligible shareholder required to exercise all of the subscription rights received in the rights offering?

No. You may exercise any number of your subscription rights or you may choose not to exercise any subscription rights. If you do not exercise any subscription rights, the number of shares of our common stock you own will not change by this offering, but the dilution of your percentage ownership of the company will be greater.

How can eligible shareholders minimize the dilution of their ownership interest in the company?

By exercising your Basic Subscription Privileges in full. Because we are converting into shares of our common stock on the same terms as the offering loans totaling $5.45 million plus accrued interest extended to the company by two of our directors, there will be some dilution in the relative ownership interests of our current shareholders. These two directors, H. Lynn Keene and B. Scott White, extended unsecured loans to the company which enabled the company to pay off the outstanding balance of the company’s line of credit owed to the Federal Deposit Insurance Corporation (the “FDIC”) as receiver for Silverton Bank, which line of credit was secured by the Bank’s common stock. The company had attempted unsuccessfully to refinance this line of credit, and without the loans provided by these two directors, the company would have been unlikely to have been able to repay the line of credit when due resulting in default. To minimize the financial impact of these loans, directors Keene and White, agreed that the company could retire the indebtedness by converting it to equity on the same terms as in this offering. As a result of issuing these Conversion Shares, our current shareholders will be diluted to some extent, but

3

this dilution can be minimized by exercising your Basic Subscription Privilege in full. In addition, if you do not exercise your Basic Subscription Privilege in full, you will not be entitled to exercise your Over-Subscription Privilege, which will further minimize the ownership dilution associated with the Conversion Shares.

How soon must an eligible shareholder act to exercise subscription rights?

If you received a rights certificate and elect to exercise any or all of your subscription rights, the subscription agent must receive your completed and signed rights certificate and payment, including final clearance of any personal check, before the rights offering expires on [June 15,] 2012, at 5:00 p.m., Eastern Time. If you hold your shares in the name of a broker, dealer, custodian bank or other nominee record holder, your nominee record holder may establish a deadline before the expiration of the rights offering by which you must provide it with your instructions to exercise your subscription rights. Although our board of directors may, in its discretion, extend the expiration date of the rights offering, but not beyond [August 15,] 2012 in any event, we currently do not intend to do so. Our board of directors may cancel the rights offering at any time. If we cancel the rights offering, all subscription payments received will be returned as soon as practicable, without interest or penalty. See “The Offering – The Rights Offering – Payment Method for Subscription Rights.”

Although we will make reasonable attempts to provide this prospectus to our shareholders, the rights offering and all subscription rights will expire on the expiration date ([June 15,] 2012 unless extended, but not beyond [August 15,] 2012), whether or not we have been able to locate each person entitled to subscription rights.

How does an eligible shareholder exercise subscription rights if he or she owns shares in certificate form?

If you hold a common stock certificate and you wish to participate in the rights offering, you must deliver a properly completed and signed rights certificate, together with payment of the purchase price, to the subscription agent before 5:00 p.m., Eastern Time, on [June 15,] 2012 (unless the expiration date is extended by our board of directors). If you send a personal check, payment will not be deemed to have been delivered to the subscription agent until the check has cleared. In certain cases, you may be required to provide signature guarantees.

Please follow the delivery instructions on the rights certificate. You are solely responsible for completing delivery to the subscription agent of your subscription documents, rights certificate and payment. You should allow sufficient time for delivery of your subscription materials to the subscription agent and for clearance of personal checks so that the subscription agent receives the materials and payment by 5:00 p.m., Eastern Time, on [June 15,] 2012.

If you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received, subject to the availability of shares under the Over-Subscription Privilege and the elimination of fractional shares.

How does an eligible shareholder participate in the rights offering if his or her shares are held in the name of a broker, dealer, custodian bank or other nominee record holder (“street name”)?

If you hold your shares of common stock through a broker, dealer, custodian bank or other nominee record holder, then your nominee record holder is the record holder of the shares you own. The nominee record holder must exercise the subscription rights on your behalf. If you wish to purchase our common stock through the rights offering, you should contact your broker, dealer, custodian bank or other nominee record holder as soon as possible. Please follow the instructions of your nominee record holder. Your nominee record holder may establish a deadline that may be before the expiration date of the rights offering.

To whom should eligible shareholder send forms and payment to exercise subscription rights?

We have appointed Registrar and Transfer Company to act as subscription agent, escrow agent and information agent for the offering. We will pay all customary fees and expenses of the subscription agent, escrow agent and the information agent related to the offering. We also have agreed to indemnify Registrar and Transfer Company from liabilities that they may incur in connection with the offering.

Eligible shareholders whose shares are held in the name of a broker, dealer, custodian bank or other nominee record holder, should follow the instructions of the nominee record holder with respect to submitting subscription documents and subscription payment to that record holder. If your nominee record holder does not provide you submission instructions, you should contact your nominee record holder as soon as possible. If you are the record holder, then you should send your subscription documents, rights certificate and subscription payment by mail or overnight courier to:

Registrar and Transfer Company

Attn. Reorg. Department

10 Commerce Drive

Cranford, NJ 07016

1-800-368-3948

4

You or, if applicable, your nominee record holder are solely responsible for completing delivery to the subscription agent of your subscription documents, rights certificate and payment. You should allow sufficient time for delivery of your subscription materials to the subscription agent and clearance of payment before the expiration of the rights offering at 5:00 p.m. Eastern Time on [June 15,] 2012, unless extended at our discretion, but not beyond [August 15,] 2012.

If an eligible shareholder participates in the rights offering may he or she also participate in the public offering?

Yes. Whether or not you elect to participate in the rights offering, you may subscribe for shares in the public offering, if available. However, if sufficient shares are subscribed for in the rights offering which, together with the shares subscribed by our directors, equal or exceed the Maximum Offering Amount (that is, the greatest number of shares we are offering in total in the offering) or if the Board of Directors chooses to terminate the offering once the shares subscribed equal or exceed the Minimum Offering Amount, you may not receive any shares in the public offering for which you have subscribed.

Are there any limits on the number of shares I may purchase?

As a bank holding company, we are subject to regulation by the Federal Reserve and the Virginia Bureau. The Federal Reserve and the Virginia Bureau have the authority to prevent individuals and entities from acquiring control of us. Under Federal Reserve rules and Virginia law, if you and your affiliates ( as defined in the applicable Federal and Virginia law and regulations) directly or indirectly, or through one or more subsidiaries, or acting in concert with one or more persons or entities, will own more than 25% of our common stock after giving effect to the rights offering, then you will be deemed conclusively to control us and would need to obtain prior approval of the Federal Reserve and Virginia Bureau to complete the purchase. If, after giving effect to the rights offering, and any shares you acquire in the public offering, you and your affiliates (as defined in the applicable Federal law and regulations) will own 10% or more of our common stock, you will be presumed to control us and would need to obtain prior approval of the Federal Reserve to complete the purchase, unless the circumstances support a rebuttal of such presumption. Except for the Conversion Shares, we will not issue shares pursuant to the exercise of Basic Subscription Privileges or Over-Subscription Privileges, or to any investor in the public offering who, in our sole opinion, could be required to obtain prior clearance or approval from or submit a notice to any federal or state bank regulatory authority to acquire, own or control such shares if, as of the date we are to issue shares acquired in the offering ( not earlier than [June 15,] 2012 or later than [September 15,] 2012 (unless we extend the offering but not beyond December 31, 2012) such clearance or approval has not been obtained or any applicable waiting period has not expired. See “The Offering – Limitation on the Purchase of Shares.” You are urged to consult your own legal counsel regarding whether you are required to seek the prior approval of the Federal Reserve and Virginia Bureau in connection with your exercise of subscription rights or before subscribing in the public offering.

How was the $1.50 per share subscription price determined?

Our board of directors (excluding directors Keene and White who will receive the Conversion Shares) determined the subscription price of the shares offered in the offering and for purposes of the Conversion Shares after considering a number of factors in determining the price. These factors included, the need to offer the shares at a price that would be attractive to investors, historical and current trading prices for our common stock, general conditions in the financial services industry, the need for capital, and alternatives available to us for raising capital, potential market conditions, and the receipt of a fairness opinion of Scott & Stringfellow, L.L.C. (“S&S”) delivered on March 19, 2012. In conjunction with its review of these factors, the board of directors also reviewed our history and prospects, including our past and present earnings, our prospects for future earnings, and the outlook for our industry, our current financial condition and regulatory status and a range of discounts to market value represented by the subscription prices in prior offerings of other financial institutions.

We retained S&S to advise us with respect to an appropriate per share subscription price for the shares of common stock and warrants to be issued in connection with the offering. On March 19, 2012, S&S rendered a

5

fairness opinion to our board of directors that stated that the consideration to be received by the Company for a share and warrant in the offering was fair, from a financial point of view, to the company and the subscription price was fair, from a financial point of view, to our shareholders (other than directors Keene and White).

We have attached the full text of S&S’s fairness opinion as Annex A to this prospectus. You should read the entire opinion to understand the assumptions made, matters considered and limitations on the review undertaken by our financial advisor. The opinion does not constitute a recommendation as to whether you should exercise your rights in the rights offering or acquire shares in the public offering.

A discussion of the factors considered and analysis by S&S is set out in the section entitled “Determination of Subscription Price” on page     . We have agreed to pay S&S a fee of $100,000 in connection with the fairness opinion, which payment is not conditioned on consummation of the offering or subscription for a certain number of shares.

The subscription price does not necessarily bear any relationship to book value of our assets, net worth, past operations, net income, cash flows, losses, financial condition, or any other established criteria for value. You should not consider the subscription price as an indication of value of the company or our common stock. You should not assume or expect that, after the offering, our common stock will trade at or above the subscription price in any given time period. The market price of our common stock may decline during or after the offering. You may not be able to sell the underlying shares purchased during the offering at a price equal to or greater than the subscription price, and the market price for our common stock may be lower than the exercise price of the warrants. You should obtain a current quote for our common stock before subscribing and make your own assessment of our business and financial condition, our prospects for the future, and the terms of this offering.

May subscription rights or the warrants I receive in the offering be transferred?

No. You may not sell, transfer or assign your subscription rights or, should you acquire shares, the warrants you receive to anyone. Subscription rights and warrants will not be listed for trading on any stock exchange or market. Rights certificates may be completed or warrants exercised only by the shareholder of record who receives the certificate or warrants. The warrants are not attached to the shares being offered in this offering; if a purchaser subsequently transfers shares purchased in this offering, the purchaser will retain any related warrants.

What are the terms of the warrants that will be issued in connection with the issuance and sale of the shares?

For every five shares you acquire in this offering you will be issued a warrant entitling you to purchase one share of common stock for $1.75 per whole share. Each warrant is exercisable immediately upon completion of the offering and expires on the fifth anniversary of the completion of the offering. Subsequent to issuance, the warrants will be adjusted to reflect any stock split, stock dividend or similar events affecting our common stock. The warrants will not be transferable and assignable. The terms of the warrants shall not permit cashless exercise. The warrants will not have voting rights.

No fractional warrants will be issued. If you purchase a number of shares that is not a multiple of five, the number of warrants that you receive will be rounded to the nearest whole warrant. For example, if you purchase 15 shares, you will receive three warrants for three shares. If, however, you purchase 14 shares, you will receive two warrants for two shares.

Will the recipients of the Conversion Shares be entitled to warrants?

Yes. We will issue warrants to the recipients of the Conversion Shares with the same terms as the warrants issued in connection with other shares acquired in the offering.

Are we requiring a minimum overall subscription to complete the offering?

Yes. We are requiring an overall minimum subscription to complete the offering. We must receive valid subscriptions in the rights offering and the public offering for a minimum of 6,666,667 shares ($10,000,000.50) in order to complete the offering. If we do not, we will terminate the offering and, except for the Conversion Shares, we will cancel all subscriptions and return the funds held in escrow, without interest, to the shareholders who subscribed in the rights offering and investors who subscribed in the public offering. See “The Offering – Overview.”

6

Can the board of directors cancel or extend the offering?

Yes. Our board of directors may decide to cancel the rights offering, the public offering, or the entire offering at any time and for any reason. If so, any money received from subscribing shareholders and investors in the canceled offering will be returned as soon as practicable, without interest or penalty. We also have the right to extend the offering for additional periods ending no later than December 31, 2012, although we do not presently intend to do so.

Has the board of directors made a recommendation to eligible shareholders regarding the rights offering or to investors in the public offering?

No. Our board of directors is making no recommendation regarding your subscription for shares in this offering, including the exercise of subscription rights by eligible shareholders. Shareholders and other investors who acquire shares will incur investment risk on new money invested. We cannot predict the price at which our shares of common stock will trade after the offering. The market price for our common stock may decrease to an amount below the subscription price, and if you purchase shares at the subscription price, you may not be able to sell the underlying shares of our common stock in the future at the same price or a higher price. You should make your decision based on your assessment of our business and financial condition, our prospects for the future, the terms of the offering and the information contained in, or incorporated by reference into, this prospectus. See “Risk Factors” for a discussion of some of the risks involved in investing in shares of our common stock.

Will our directors and executive officers participate in the offering?

Yes. Our directors have collectively committed to subscribe for 666,667 shares. In addition, two directors will receive 3,633,332 Conversion Shares. We expect executive officers, together with their affiliates, to participate in this offering at varying levels, but they are not required to do so. Our directors and officers are entitled to participate in the offering on the same terms and conditions applicable to all shareholders. No director or executive officer will acquire shares in connection with the offering that will cause his beneficial ownership to exceed 9.9% of our outstanding common stock, except possibly the two directors receiving the Conversion Shares. The beneficial ownership of directors Keene and White could each exceed 9.9% depending on the number of shares issued in connection with the offering. A beneficial ownership level over 10% would cause a regulatory rebuttable presumption of control of the company and would require approval by the Federal Reserve, which we expect to be received .Following the offering and issuance of the Conversion Shares, our directors and executive officers are expected to beneficially own 20,497,121 shares of common stock, or 30.10% of our total outstanding shares of common stock if we sell the Minimum Offering Amount, and 30,497,121 shares of common stock, or 20.23% of the total outstanding shares of common stock if we sell the Maximum Offering Amount. See “The Offering - Directors’ and Executive Officers’ Participation.”

What form of payment is required to purchase shares?

Payments submitted to the subscription agent must be made U.S. Dollars, by personal check drawn on any U.S. bank including New Peoples Bank, or a cashier’s check drawn only on New Peoples Bank and in either case payable to “Registrar and Transfer Company” or wire transfer. If you send payment by personal check, payment will not be deemed to have been delivered to the subscription agent until the check has cleared, which may take several days after receipt.

When will I receive my new shares?

If, when and after we receive subscriptions for the Minimum Offering Amount (but not prior to the expiration of the rights offering) we may elect (but we are not required) to issue the shares subscribed for in the offering on one or more occasions until we reach the Maximum Offering Amount or the offering expires or we cancel it, whichever occurs first, at which time we will issue the shares not previously issued as soon as practicable afterward.

After I send in my payment to the subscription agent, may I cancel my subscription?

No. All subscriptions are irrevocable unless the offering is cancelled or we don’t receive subscriptions for the Minimum Offering Amount, even if you later learn information that you consider to be unfavorable to your subscription. You should not subscribe unless you are certain that you wish to purchase shares at the subscription price of $1.50 per share.

7

What effects will the offering have on our outstanding common stock?

Assuming no other transactions by us involving our common shares, prior to the expiration of the offering, if we sell the Maximum Offering Amount together with the Conversion Shares, an additional 20,300,000 shares of our common stock will be issued and outstanding after the closing of the offering, for a total of 30,310,178 shares of common stock outstanding. As a result of the offering, the ownership interests and voting interests of the existing shareholders will be diluted, but shareholders can minimize the dilution by exercising their Basic Subscription Privilege to the fullest extent. The exact number of shares that we will issue in the offering will depend on the number of shares that are subscribed for in the rights offering and acquired by investors in the public offering.

In addition, if the subscription price of the shares is less than the market price of our common stock it will likely reduce the market price per share of shares you already hold.

How much will the company receive from the offering?

If we sell the Maximum Offering Amount, we estimate that the proceeds to us will be $ 25,000,000.50 million. If we sell the Minimum Offering Amount, we estimate that the proceeds to us from the offering will be approximately $10,000,000.50 million. See “Use of Proceeds.”

Are there risks in purchasing?

Yes. The purchase of our common stock involves risks. Your subscription represents the purchase of additional shares of common stock, and you should consider this investment as carefully as you would consider any other investment. Among other things, you should carefully consider the risks described under the heading “Risk Factors” beginning on page      of this prospectus and in the documents incorporated by reference into this prospectus.

If subscriptions for the Minimum Offering Amount are not received, will my subscription payment be refunded to me?

Yes. The subscription agent will hold all funds it receives in a segregated bank account until completion of the offering. If we do not receive subscriptions for the Minimum Offering Amount, all subscription payments received by the subscription agent will be returned as soon as practicable, without interest or penalty, but the Conversion Shares will still be issued. For shareholders who exercise subscription rights related to shares held in “street name,” it may take longer for you to receive your subscription payment because the subscription agent will return payments through the nominee record holder of your shares.

What fees or charges apply if I purchase shares in the offering?

We are not charging any fee or sales commission to you or to issue shares to you if you subscribe. If you are an eligible shareholder and you exercise your subscription rights through a broker, dealer, custodian bank or other nominee record holder, you are responsible for paying any fees your record holder may charge you.

What are the U.S. federal income tax consequences to eligible shareholders of exercising subscription rights?

For U.S. federal income tax purposes, you should not recognize income or loss in connection with the receipt or exercise of subscription rights in the rights offering or the purchase of shares in the public offering. You should consult your tax advisor as to your particular tax consequences resulting from the offering. For a detailed discussion, see “Certain U.S. Federal Income Tax Consequences.”

To whom should investors in the offering send subscription forms and payment?

Registrar and Transfer Company

Attn: Reorg. Department

10 Commerce Drive

Cranford, NJ 07016

1-800-368-3948

Checks should be payable to Registrar and Transfer Company

8

For wire transfers:
For Benefit Of:	Registrar and Transfer Company
	As Subscription Agent for Various Holders
Account No:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA No:	031-201-360

Whom should I contact if I have other questions?

If you have any questions regarding the offering, completing any form or submitting payment, please contact Registrar and Transfer Company at (800) 368-5948.

9

PROSPECTUS SUMMARY

The following summary contains certain material information about us and this offering. Because this is a summary, it may not contain all of the information important to you. Therefore, to understand this offering fully, you should read the entire prospectus carefully before making a decision to invest in our common stock, including the risks discussed under the “Risk Factors” section and the information incorporated by reference in this prospectus, including our audited consolidated financial statements and the accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2011.

The Company

The company is a Virginia bank holding company headquartered in Honaker, Virginia. We provide financial services to individuals, small to medium-size businesses, and the professional community within our local markets. We conduct our operations primarily through our wholly-owned subsidiary, New Peoples Bank, Inc., a Virginia banking corporation, and its wholly-owned subsidiary NPB Financial Services, Inc., an insurance agency. The Company’s other subsidiaries include NPB Web Services, Inc., which is currently inactive and NPB Capital Trust I and NPB Capital Trust 2, which were formed for the issuance of trust preferred securities.

We opened for business on October 28, 1998 with three branch offices and have expanded to 27 full-service offices across southwestern Virginia, southern West Virginia, and northeastern Tennessee. We have been able to grow our loan and deposit market share by developing personal, hometown relationships with the individuals, small and medium-sized businesses, and professionals in our communities. We believe that providing customized, responsive banking solutions through our talented network of bankers has enabled us to establish strong, lasting relationships within our communities. We have approximately 4,400 local shareholders, many of whom are customers of the Bank.

Our principal business objective is to attract deposits and lend those deposits to creditworthy borrowers within our markets, providing a risk-adjusted return to our shareholders. We offer traditional loan and deposit banking services, as well as investment services, remote deposit capture, internet banking, mobile banking and telephone banking coupled with responsive and other technologically advanced banking solutions. These services include loans that are priced on a deposit relationship basis, easy access to our decision makers, and the ability to take quick and innovative action necessary to meet a customer’s banking needs.

At December 31, 2011, we had consolidated total assets of $780.4 million, gross loans of $597.8 million, total deposits of $708.3 million and shareholders’ equity of $28.9 million. For the year ended December 31, 2011, we had a net loss of $8.9 million, primarily resulting from a loan loss provision expense of $8.0 million, other real estate owned expense of $5.6 million and a non-cash goodwill impairment of $4.1 million. For the year ended December 31, 2010, we had a net loss of $9.1 million, primarily resulting from a loan loss provision expense of $22.3 million and other real estate owned expense of $2.2 million. We continue to maintain a strong net interest margin. For the year ended December 31, 2011, our net interest margin was 4.29% and for the year ended December 31, 2010 our net interest margin was 4.35%.

At December 31, 2011, our leverage ratio was 4.23%, our tier 1 capital ratio was 6.57%, our total capital to risk-weighted assets was 9.15%, and our tangible equity to tangible assets was 3.68%. Tangible book value per share at December 31, 2011 was $2.87. We did not apply for, and therefore are not participating in, the Treasury’s Capital Purchase Program, known as “TARP,” or any other bank capital program offered by the Treasury.

Our Market Area

Our primary market area consists of southwestern Virginia, southern West Virginia and northeastern Tennessee. Specifically, we operate in the southwestern Virginia counties of Russell, Scott, Washington, Tazewell, Buchanan, Dickenson, Wise, Lee, Smyth, and Bland; Mercer County in southern West Virginia and the northeastern Tennessee counties of Sullivan and Washington (collectively, the “Tri-State Area”). The close proximity and mobile nature of individuals and businesses in adjoining counties and nearby cities in Virginia, West Virginia and Tennessee place these markets within our Bank’s targeted trade area, as well.

Accessibility to Interstates I-77, I-81, I-26, I-64 and I-75, as well as major state and U.S. highways including US 19, US 23, US 58, US 460 and US 421, make the area an ideal location for businesses to serve markets in the Mid-Atlantic, Southeast and Midwest. The area is strategically located midway between Atlanta-Pittsburgh,

10

Charlotte-Cincinnati, and Richmond-Louisville, and is within a day’s drive of more than half of the U.S. population. A regional airport located in Bristol, Tennessee serves the area with commercial flights to and from major cities in the United States. Commercial rail service providers include CSX Transportation and Norfolk Southern Railways.

The Tri-State Area has a diversified economy supported by natural resources, which include coal, natural gas, limestone, and timber; agriculture; healthcare; education; technology; manufacturing and services industries. Predominantly, the market is comprised of locally-owned and operated small businesses. Considerable investments in high-technology communications, high-speed broadband network and infrastructure have been made which has opened the area to large technology companies and future business development potential for new and existing businesses. Industries are taking advantage of the low cost of doing business, training opportunities, available workforce and an exceptional quality of life experience for employers and employees alike.

Competitive Strengths

Our overall mission continues to be to build a high performing community bank focused on providing high quality, state of the art, “golden rule” banking services within our communities, resulting in increased shareholder value. Our immediate business strategy is directed towards returning to profitability, improving asset quality, and enhancing our regulatory capital levels so that over the long-term, we may position ourselves favorably to take advantage of future growth opportunities within our markets and to pay dividends to shareholders. We believe the following business strengths have historically differentiated us from our banking competitors and will provide the foundation for us to return to being a high performing institution built on serving our customers and creating franchise value through profitable growth.

Leading Deposit Market Share. At June 30, 2011, there were 39 financial institutions, exclusive of credit unions, operating 304 branch offices holding approximately $10.9 billion in total deposits in the Tri-State Area. At June 30, 2011, we held the number two deposit market share position with approximately 8.85% of the Tri-State Area deposits. Deposits in the Tri-State Area grew at a 5-year compounded annual rate of approximately 2.3%, while our deposits increased over the same period at a rate of 4.6%. Additionally, we have strong market penetration with convenient branch locations. Our 27 branch offices rank us second in total number of branch offices among financial institutions in the Tri-State Area.

Core Deposit Base. Since inception, we have focused on providing high quality, “golden rule” banking services within our communities. Our ability to provide superior service combined with one of the largest branch networks in the Tri-State Area has enabled us to develop a strong core deposit base from which we are able to fund our loan growth. At December 31, 2011, checking, money market and savings accounts comprised 37.1% of our total deposits, with 15.5% being noninterest bearing. In addition, 76.4% of our total deposits were core deposits (defined as total deposits less certificates of deposit with balances greater than $100,000), and we held only $2.7 million in brokered deposits which we believe compares favorably to many of our bank peers.

Historically Strong Net Interest Margin Management. We continue to focus on successfully managing a strong net interest margin. During the past five years, we have maintained an annual average net interest margin in excess of 4.00%. We have been able to do this through effectively managing the pricing on our deposits and loans. As a result of our core deposit mix, we have historically maintained a low cost of deposits. For the year ended December 31, 2011, our cost of deposits was 1.11%, which continues to drive a strong net interest margin. For the year ended December 31, 2011, our net interest margin was 4.29% and for the year ended December 31, 2010 our net interest margin was 4.35%. We believe we can continue to maintain a strong net interest margin above 4.00% which is a key contributor to delivering consistent profitability resulting in solid returns to shareholders. We will accomplish this by continuing to improve asset quality, cultivating and growing our core deposit base, and by effectively positioning ourselves to maintain or improve our net interest margin in both rising and falling interest rate cycles.

11

Management Team. Our executive management team has significant community banking experience developing and managing relationships with individuals, small to medium-sized businesses, and professionals in our communities. Our executive management team consists of 4 officers who have over 130 years of combined experience, with an average of over 33 years experience in the financial services industry. The table below identifies our executive officers:

Name	Position	Years of Experience
Jonathan H. Mullins	President and Chief Executive Officer	31
Frank Sexton, Jr.	Executive Vice President and Chief Operating Officer	40
C. Todd Asbury	Executive Vice President, Chief Financial Officer, Secretary and Treasurer	24
Stephen W. Trescot	Executive Vice President and Chief Credit Officer	39

Board of Directors. Our board of directors is comprised of eleven community leaders, ten of whom are independent. In 2010, we named as directors Jonathan Mullins, our CEO, and Eugene Hearl, a retired 40 year southwest Virginia banking veteran who has held the President and CEO position at two local community banks and served as a Regional President for the former Dominion Bank. Our board of directors and insiders currently own approximately 9.90% of our common stock and have agreed to purchase $1.0 million (666,667 Shares) in the offering (exclusive of the debt conversion discussed below), which would result in pro forma ownership of 20.23% if the Maximum Offering Amount are sold and 30.10% if the Minimum Offering Amount are sold.

Recent Investments in our Company

Two of our directors, H. Lynn Keene and B. Scott White, have provided a combined $5.45 million in unsecured credit to the company in the fourth quarter of 2010 and first quarter of 2011. These loans provided us with working capital and enabled us to retire the outstanding $4.9 million line of credit we owed to the FDIC as receiver for Silverton Bank which was secured by the Bank’s common stock. The company is obligated (but subject to any required regulatory approval) to convert $5.45 million plus any accrued but unpaid interest of this indebtedness into common stock.

We will convert the $5.45 million indebtedness and accrued interest to common stock with the same terms and conditions offered in the offering upon completion or termination of the offering. Full conversion would result in Mr. Keene and Mr. White beneficially owning a total of 2,252,510 and 2,723,588 shares, respectively, including previously owned shares, 8,060 vested stock options each, and shares acquired in this offering, of the company’s common stock. Such beneficial ownership totals for Mr. Keene and Mr. White would result in pro forma beneficial ownership of 7.39% and 8.93%, respectively, if the Maximum Offering Amount is sold, and 10.99% and 13.29%, respectively, if the Minimum Offering Amount is sold. The acquisition of these additional shares by these directors through the conversion of this indebtedness could cause each director (together with the director’s affiliates (as defined in the applicable Federal Reserve regulations) total ownership of our shares to exceed 10% of our total outstanding shares, depending on the number of shares sold in this offering. An ownership level over 10% would require regulatory approval, which we expect to be received.

Response to Recent Economic and Operational Challenges

Asset Quality Stabilization

The current economic crisis has severely affected many financial institutions across the United States, including our company. The deterioration of the residential and commercial real estate markets has resulted in significant increases in our nonperforming assets. Our total nonperforming assets increased from $34.2 million or 3.99% of total assets at December 31, 2009 to $58.9 million or 7.55% of total assets at December 31, 2011. However, as the chart below highlights, we believe asset quality has begun to stabilize as evidenced by the 1.52% decrease in total nonperforming assets from $59.8 million at December 31, 2010 to $58.9 million as of December 31, 2011.

12

Nonperforming Asset Migration

($ in 000s)	For the Years Ended December 31,
	2011			2010			2009			2008
90 Days Past Due (still accruing)	$	1,504		$	1,693		$	3,875		$	33
Nonaccrual Loans		42,316			45,781			24,713			6,414
Other Real Estate Owned (OREO)		15,092			12,346			5,643			2,496
Total NPAs	$	58,912		$	59,819		$	34,231		$	8,943
NPAs/Total Assets		7.55	%		7.02	%		3.99	%		1.11	%
NPLs/Total Loans		7.33	%		6.71	%		3.74	%		0.89	%
NCOs/Average Loans		2.79	%		2.14	%		0.15	%		0.17	%

We believe we have been aggressive in working towards the resolution of our nonperforming assets. The significant improvements in our credit underwriting and special assets departments have increased our ability to identify and monitor potential credit issues. Since 2009, we have expensed a total of $43.1 million in provision for loan losses and recognized net charge-offs of $31.8 million which resulted in a cumulative net loss of $21.7 million during that time period. At December 31, 2011, our allowance for loan losses to gross loans was 3.07%. These losses have decreased our regulatory capital levels. The proceeds from this offering should strengthen our regulatory capital levels and provide management the flexibility to continue resolving our nonperforming assets and restoring the company back to profitability.

Strategic Initiatives Implemented by Company

In order to better insulate ourselves from any future challenges affecting the economy at large and improve our internal processes, we have implemented significant personnel and structural changes to improve our overall risk management, credit underwriting and monitoring capabilities necessary to identify and manage more effectively the risks inherent in our loan portfolio. Along with these changes, the company believes it has been aggressive in both charging off problem loans and supplementing the loan loss reserve for any future losses in the loan portfolio. As evidence, the company has cumulatively charged-off $24.0 million in bad loans since September 30, 2010 and currently reports a loan loss reserves/total loans figure of 3.07% as of December 31, 2011. In response to the recent economic and operational challenges we have taken the following steps:

• Proactively Downsized Balance Sheet and Back-office Operations

• Reduced gross loans over $165.8 million from $763.6 million to $597.8 million from December 31, 2009 to December 31, 2011;

• Closed/consolidated four unprofitable branch offices since 2010, will consolidate four additional offices at May 31, 2012, and will continue to evaluate performance of the branch network;

• Reduced overhead through aforementioned branch closings and a reduction in full time equivalent employees resulting in excess of $1.0 million in annual non-interest expense cost savings; and

• Lowered our cost of deposits over 114 basis points from 2.25% at December 31, 2009 to 1.11% at December 31, 2011.

• Enhanced and Reorganized Management and Board of Directors

• Hired a new, outside Chief Credit Officer with over 30 years experience in credit administration and loan portfolio risk;

• Re-positioned our former Chief Credit Officer to Senior Loan Officer with responsibility for the Bank’s loan production and business development; and

• Appointed a new outside director, Eugene Hearl, who has over 40 years of banking experience to the board of directors.

• Updated and Improved Internal Controls and Procedures

• More fully developed and staffed the special assets department with eight full-time employees;

13

• Created a commercial lending division with nine lenders and support staff managed by the Bank’s Senior Lending Officer;

• Adopted new loan policies and procedures with stricter credit underwriting standards, streamlined the loan approval process, and implemented a continuing education program for employees;

• Enhanced loan concentration identification and implemented new procedures for monitoring and managing loan concentrations;

• Reduced all loan concentration limits below Federal Reserve guidelines;

• Established a new allowance for loan loss model and policy and assigned oversight to an employee with significant Allowance for Loan Loss (“ALLL”) experience;

• Improved our liquidity position, approved a new liquidity policy and enhanced liquidity reporting; and

• Developed a newly revised three year strategic and capital plan.

Projected Loan Loss Analyses

In addition to the increased provisioning, proactive balance sheet management, personnel enhancements and improved internal controls outlined above, we and a third party loan review firm have conducted several portfolio stress tests to better project the future loan losses in our loan portfolio. These methodologies included:

• Third Party “Stress Test” –The company engaged a third party loan review firm to perform a comprehensive stress test on a significant portion of our loan portfolio in order to help us estimate the potential credit losses remaining in our loan portfolio over the next two years. The stress test forecasted potential credit losses for three scenarios: low, medium and high. The most recent stress test performed was based on our September 30, 2010 loan portfolio and OREO properties and projected the potential low, medium and high loss scenarios that could be incurred through September 30, 2012.

• Third Party Loan Review – In addition to the third party loan loss stress tests described above, the company also engaged the same third party to perform quarterly loan reviews in 2010 and 2011 to supplement the company’s quarterly ALLL methodology and internal loan reviews. The company has engaged the third party for loan reviews again in 2012.

• SCAP Analysis – In May 2009, nineteen of the largest banks in the U.S. participated in a Federal Reserve “stress test” (“the SCAP analysis”) to estimate the level of potential credit losses across the U.S. banking system. The company, with the help of its financial advisor, replicated this analysis to project its potential credit losses by loan type using the Federal Reserve’s “more adverse” loss rates.

• Internal Loan Review – The company conducted an extensive review of its loan portfolio in the fourth quarter of 2011. The review forecasted the potential credit impairment losses for each classified loan in the special assets department and projected potential impairment losses for the remainder of the loan portfolio by applying additional loss rates. Results from this analysis were consistent with those of the most recent third party loan review and SCAP analysis discussed above.

It is important to note that we have not relied on any singular methodology outlined above to estimate potential losses inherent in our loan portfolio, and we believe that each of the analyses produced conclusions that are consistent with management’s assessment of the portfolio. Further, while the strength of the economic recovery (particularly as it affects real estate values) is largely uncertain, based on the loan impairment analyses performed above, our internal financial projections, and the additional capital expected to be raised in this offering, we believe that our capital levels will be at levels sufficient to satisfy our current regulatory requirements.

Supervisory Actions

On August 4, 2010, we entered into and have since been operating under the Formal Agreement with the Federal Reserve and the Virginia Bureau. The Formal Agreement is referenced as an Exhibit to our 2011 Form 10-K which incorporates it by reference from our Form 8-K filed with the Securities Exchange Commission (“SEC”) on August 6, 2010. We believe we have made good progress in our compliance efforts under the Formal Agreement, and we believe all of the written plans required to date, as discussed in the following paragraph, have been submitted on a timely basis.

Under the terms of the Formal Agreement, the Bank agreed to develop and submit for approval within specified time periods written plans to: (a) strengthen the board of directors oversight of management and the

14

Bank’s operation; (b) strengthen the Bank’s management and Board governance; (c) strengthen credit risk management policies; (d) enhance lending and credit administration; (e) enhance the Bank’s management of commercial real estate concentrations; (f) conduct ongoing review and grading of the Bank’s loan portfolio; (g) improve the Bank’s position with respect to loans, relationships, or other assets in excess of $1 million which are now or in the future become past due more than 90 days, which are on the Bank’s problem loan list, or which are adversely classified in any report of examination of the Bank; (h) review and revise, as appropriate, current policy and maintain sound processes for maintaining an adequate allowance for loan and lease losses; (i) enhance management of the Bank’s liquidity position and funds management practices; (j) revise its contingency funding plan; (k) revise its strategic plan; and (l) enhance the Bank’s anti-money laundering and related activities.

In addition, the Bank agreed that it will: (a) not extend, renew, or restructure any credit that has been criticized by the Federal Reserve Bank or the Virginia Bureau absent prior board of directors approval in accordance with the restrictions in the Formal Agreement; (b) eliminate all assets or portions of assets classified as “loss” and thereafter charge off all assets classified as “loss” in the federal or state report of examination, unless otherwise approved by the Federal Reserve Bank. We believe we are in compliance with these requirements.

Under the terms of the Formal Agreement, both the Company and the Bank have agreed to submit capital plans to maintain sufficient capital at the Company and at the Bank, on a stand-alone basis, and to refrain from declaring or paying dividends without prior regulatory approval. The Company has also agreed that it will not take any other form of payment representing a reduction in the Bank’s capital or make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without prior regulatory approval. The Company may not incur, increase or guarantee any debt without prior regulatory approval and has agreed not to purchase or redeem any shares of its stock without prior regulatory approval. We have submitted the required capital plans, and the Company is in compliance with the provisions relating to distributions from the Bank.

Under the terms of the Formal Agreement, the Company and the Bank have appointed a committee to monitor compliance with the Formal Agreement. The directors of the Company and the Bank have recognized and unanimously agree with the common goal of financial soundness represented by the Formal Agreement and have confirmed the intent of the directors and executive management to diligently seek to comply with all requirements of the Formal Agreement.

Risk Factors

Before investing, you should carefully consider the information set forth under “Risk Factors,” beginning on page 16, for a discussion of risks related to an investment in our common stock.

Corporate Information

Our principal executive offices are located at 67 Commerce Drive, Honaker, Virginia 24260, and our telephone number is (276) 873-6288. Information on our websites, www.npbankshares.com and www.newpeoplesbank.com, is not incorporated herein by reference and are not part of this prospectus.

15

RISK FACTORS

An investment in the shares involves various risks. You should carefully consider the risk factors listed below. These risk factors may cause the Company’s future earnings to be lower or its financial condition to be less favorable than it expects. In addition, other risks which we are not aware of, or which we do not believe are material, may cause the Company’s earnings to be lower, or hurt its future financial condition. You should read this section together with the other information in this prospectus.

Factors Related to Us

On August 4, 2010, we entered into the Formal Agreement with the Federal Reserve and the Virginia Bureau. This is a form of regulatory enforcement: a written agreement under Section 8 of the Federal Deposit Insurance Act. It imposes significant requirements and restrictions on us. Failure to comply could result in additional regulatory enforcement actions which would severely and adversely affect us.

We have entered into the Formal Agreement with the Federal Reserve and the Virginia Bureau by which we have committed ourselves to taking specified actions within specified periods of time to improve our safety and soundness in light of our current diminished asset quality, earnings, and liquidity. (See “Supervisory Actions” section of this document for detailed information.) The Formal Agreement is referenced as an Exhibit to our 2011 Form 10-K which incorporates it by reference from our Form 8-K filed with the SEC on August 6, 2010. Under the Formal Agreement, the Bank agreed to develop and submit for approval within specified time periods written plans to: (a) strengthen board oversight of management and the Bank’s operation; (b) if appropriate after review, to strengthen the Bank’s management and board governance; (c) strengthen credit risk management policies; (d) enhance lending and credit administration; (e) enhance the Bank’s management of commercial real estate concentrations; (f) conduct ongoing review and grading of the Bank’s loan portfolio; (g) improve the Bank’s position with respect to loans, relationships, or other assets in excess of $1 million which are now or in the future become past due more than 90 days, which are on the Bank’s problem loan list, or which are adversely classified in any report of examination of the Bank; (h) review and revise, as appropriate, current policy and maintain sound processes for maintaining an adequate allowance for loan and lease losses; (i) enhance management of the Bank’s liquidity position and funds management practices; (j) revise its contingency funding plan; (k) revise its strategic plan; and (l) enhance the Bank’s anti-money laundering and related activities.

In addition, the Bank agreed that it would: (a) not extend, renew, or restructure any credit that has been criticized by the Federal Reserve Bank or the Virginia Bureau absent prior board of directors approval in accordance with the restrictions in the Agreement; (b) eliminate all assets or portions of assets classified as “loss” and thereafter charge off all assets classified as “loss” in a federal or state report of examination, which has been done.

The Company and the Bank agreed to submit capital plans to maintain sufficient capital at the Company, on a consolidated basis, and the Bank, on a stand-alone basis, and to refrain from declaring or paying dividends without prior regulatory approval. The Company agreed that it would not take any other form of payment representing a reduction in the Bank’s capital or make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without prior regulatory approval. The Company may not incur, increase or guarantee any debt without prior regulatory approval and has agreed not to purchase or redeem any shares of its stock without prior regulatory approval.

Under the terms of the Formal Agreement, the Company and the Bank have appointed a committee to monitor compliance.

The Formal Agreement affects our management, operations, business and financial condition and requires us to take certain actions and achieve certain results which we may fail to do notwithstanding our best efforts. The status of our various efforts to achieve and maintain compliance with this agreement is outlined in our 2011 Form 10-K filed with the SEC which is incorporated herein by reference. Taking these actions could materially and adversely affect your investment as they are designed to protect depositors, not necessarily shareholders. In any event, compliance efforts will occupy significant management time and effort and distract from management’s ability to carry out our regular business and impose additional costs. This could also have an adverse effect on your investment even if we achieve full compliance with the requirements of the Formal Agreement. Failure to take actions or achieve the required results under the Formal Agreement would likely lead to additional enforcement actions by the banking regulators which could materially and adversely affect your investment, possibly up to and including receivership, in which case you could lose your entire investment. You should review the Formal Agreement and the discussion concerning it in our 2011 Form 10-K.

16

Difficult market conditions have adversely affected our industry and us.

Continued declines in the real estate market over the past year after the previous dramatic declines, with falling prices and increasing foreclosures, stubbornly high unemployment and under-employment, and the generally depressed economy have negatively impacted the credit performance of loans (particularly real estate related loans) and resulted in significant write-downs of asset values by financial institutions, including us (we discuss our real estate exposure below). These write-downs have caused many financial institutions to seek additional capital, to reduce or eliminate dividends, to merge with larger and stronger institutions and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutional investors have reduced available funding to borrowers, including to other financial institutions. This market turmoil and tightening of credit and high levels of unemployment have led to an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility and widespread reduction of business activity generally. The resulting economic pressure on consumers and retailers and lack of confidence in the financial markets adversely affect our business and results of operations. Continuing market depression or stagnation or the lack of material improvement in unemployment rates may reduce yet further consumer confidence levels and may cause additional adverse changes in payment patterns, causing increases in delinquencies and default rates generally and among consumers and commercial businesses specifically, which may negatively impact our charge-offs and provision for credit losses even more. In sum, worsening of these conditions would likely exacerbate the adverse effects of these difficult market conditions on us and others in the financial institutions industry.

We have a high concentration of loans secured by real estate and the downturn in the real estate market, should it deepen or be extended, could result in additional losses and materially and adversely affect our business, financial condition, results of operations and future prospects further.

A significant portion of our loan portfolio is dependent on real estate. In addition to the financial strength and cash flow characteristics of the borrower in each case, we often secure loans with real estate collateral. At December 31, 2011, approximately 85.91% of our loans had real estate as a primary or secondary component of collateral. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value during the time the credit is extended. As a result, the recession, particularly as it has affected the real estate market as discussed above, has impacted us very negatively. Further adverse changes in the economy affecting values of real estate generally or in our primary markets specifically could significantly impair the value of our collateral and result in further under-collateralization in our portfolio. In such a case, as discussed below, it would be likely that we would be required to increase our provision for loan losses beyond current provisions, which would negatively affect our results of operations and impact capital. Liquidation of collateral securing a loan to satisfy the debt during a period of reduced real estate values diminishes our ability to recover fully on defaulted loans by foreclosing and selling the real estate collateral and we would be more likely to suffer losses on defaulted loans. Future charge-offs are substantially dependent on economic factors. While we have been aggressively charging off nonperforming loans and would therefore expect charge-offs to decline over time, if the recovery continues to be slow or if another recession occurs, real estate market values and customers’ ability to repay may be further adversely affected. Although recent delinquency trends have shown some improvement, it is uncertain if this trend will continue. A majority of the larger credits in our current portfolio have been currently valued and exposures have been identified and charged-off accordingly. As part of our aggressive efforts, acquisition, development and construction loans have been closely scrutinized to determine potential exposures and charge-offs. We are not making these types of loans currently due to the risk of the construction market. Although we have reviewed the majority of these types of loans and obtained current appraisals, future deterioration of real estate values, in particular regarding out of market projects, could occur and result in future charge-offs in this category. These circumstances could further adversely affect our return to profitability and financial condition.

Additional provisions for our allowance for loan losses and charge-offs because of economic, regulatory or other circumstances may adversely affect our results of operations.

We maintain an allowance for loan losses that we believe is a reasonable estimate of known and inherent losses in our loan portfolio. Through a periodic review and analysis of the loan portfolio, management determines the amount of the allowance for loan losses by considering general market conditions, credit quality of the loan portfolio, the collateral supporting the loans and performance of our customers relative to their financial obligations with us. As discussed above, the amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond our control, and these losses may exceed our current estimates even though we made substantial increases in our loan loss reserve in 2009, 2010 and through December 31, 2011. In addition, because of the severity of the recent recession and its ongoing effects on our loan portfolio, it is more difficult for us to adequately identify and measure risk associated with establishing the allowance for loan losses because, among other things, historical factors are not as reliable as guidelines. Thus, the

17

identification and measurement of risk in our loan portfolio depends on our ability to establish appropriate processes and credit culture for the difficult environment we are in. We cannot assure that we can achieve this. Although we believe the allowance for loan losses is a reasonable estimate of known and inherent losses in our loan portfolio, for the reasons discussed here, we cannot fully predict such losses or that our loan loss allowance will be adequate in the future. Excessive loan losses have a material impact on our financial performance. In light of these factors we may have to make additions to our loan loss reserve levels, which may affect our short-term earnings.

Also, Federal and state regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs, based on judgments different than those of our management. Any increase in the amount of our provision or loans charged-off as required by these regulatory agencies would also have a negative effect on our operating results and capital.

We currently have a high level of nonperforming assets which have negatively affected our recent financial performance. Should we continue to experience material increases or reclassifications in our nonperforming asset classes, management may need to consider a range of additional capital markets strategic alternatives.

Our nonperforming assets adversely affect our net income in various ways: we do not accrue interest on nonperforming loans, we must provide for probable loan losses through a current period charge to our provision for loan losses; non-interest expense increases when we write down the value of properties in our other owned real estate portfolio to reflect changing market values, there are legal fees associated with the resolution of problem assets, as well as carrying costs, and the resolution of nonperforming assets require the active involvement of management. If our nonperforming assets increase further, our losses could increase which could have a material adverse affect on our financial condition and results of operations.

We are taking aggressive measures to resolve our nonperforming loans which have resulted and may continue to result in charge-offs and increased OREO write-downs. We believe our enhanced identification of our nonperforming loans together with our aggressive resolution efforts reduce the likelihood that nonperforming loans will materially increase in the future. However, if the slow recovery from the recession continues, if another recession occurs, or, if other factors cause our nonperforming loans to increase materially, we are likely to have our operating results further depressed by the addition of the new nonperforming loans to our current level of nonperforming loans and to incur a higher level of charge-offs for the foreseeable future.

In January 2011 we completed a “stress test” on our loan portfolio conducted by a third party. The credit losses reflected in the stress test (together with the credit losses realized in the year ending December 31, 2011), without the additional capital provided by the Minimum Offering Amount in this offering, could cause the Bank to fall below the “well-capitalized” level within the regulatory capital classifications.

We employed a third party to conduct an independent assessment of the level of risk within the Bank’s credit portfolio, or a “stress test.” We received the stress test results in January 2011. The stress test forecasted potential credit losses for three scenarios over a two year period: Low, Medium and High. Stress tests involve complicated analyses and economic and other projections and assumptions which can render conclusions which are materially different from actual results. There can be no assurance, therefore, that the results of the stress test accurately predict the actual credit losses that the Bank may incur or the effects of such losses on the Bank’s capital. However, together with the credit losses realized in the year ending December 31, 2011, the credit losses reflected in the stress test could cause the Bank to fall below the “well-capitalized” level within the regulatory capital classifications without the additional capital provided by the sale of the Minimum Offering Amount in this offering. Further, because the results of the stress test may not accurately predict actual credit losses or their effects on our capital, even if this offering is fully-subscribed, the additional capital from the offering may not prevent us from falling below the “well-capitalized” level. In such a case, we might not be able to raise additional funds. Even if we were able to obtain additional capital, the sale of more common stock or other securities would further dilute your ownership and may be at a price lower than the price at which we are selling shares in this offering.

Our business is subject to various global events that could adversely impact our results of operations and financial condition.

Regardless of the current recession, global events can hurt our national economic recovery and, in turn, our business. Our business can be directly affected by foreign political and market conditions, events outside our country, such as wars, terrorist events, and natural disasters, that may have a significant impact on the United States, all of which are beyond our control. Globalization links the U.S. economy to those of the rest of the world; particularly, Europe and Asia. Economic downturns in those markets such as a recession in Europe, China or India, the potential break up of the Euro zone, the sovereign debt crisis, significant deterioration in the condition of European banks and similar events can dramatically affect us. Adverse events could result in the following consequences intensifying, any of which could hurt our business materially:

• loan delinquencies may increase further;

18

• problem assets and foreclosures may increase further;

• demand for our products and services may decline further; and,

• collateral for loans made by us may decline in value further, in turn reducing a client’s borrowing power, and reducing the value of assets and collateral associated with our loans held for investment.

Although our market area is somewhat economically diverse, we are not immune to the effects of matters that affect our national economy.

We may be adversely affected by economic conditions in our markets.

Our banking operations are located primarily in the Tri-State Area. Because our lending is concentrated in this market, we will be affected by the general economic conditions in the area regardless of the status of the national economy. Changes in the local economy may influence the growth rate of our loans and deposits, the quality of the loan portfolio and loan and deposit pricing. We believe we have made changes to enhance our ability to reduce the effects of economic downturns in our market on future lending but there can be no assurance of this. Significant further decline in general economic conditions in our market caused by inflation, recession, unemployment or other factors beyond our control would have an additional impact on the demand for banking products and services generally, which could negatively affect our financial condition and performance and are beyond our control. Although our market area is somewhat economically diverse, in certain areas the local economies are more reliant upon agriculture and coal mining. To the extent an economic downturn disproportionately affects these two industries, the above-described negative effects could be exacerbated. Through loan participations we acquired, we also have lending exposure in the Coastal Carolina market which has been particularly impacted by the real estate recession. Although we do not intend to take on further business in this market, additional market declines could adversely affect us further.

We face strong competition from other financial institutions, financial service companies and other organizations offering services similar to those offered by us and our subsidiaries, which could hurt our business.

Our business operations are centered primarily in the Tri-State Area. Many competitors offer the types of loans and banking services that we offer. These competitors include savings associations, national banks, regional banks and other community banks. Increased competition within this region may result in reduced loan originations and deposits irrespective of the recovery in the economy. Ultimately, we may not be able to compete successfully against current and future competitors. We also face competition from many other types of financial institutions, including finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries. These competitors include major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and to mount extensive promotional and advertising campaigns.

Additionally, banks and other financial institutions with larger capitalization and financial intermediaries have larger lending limits and are thereby able to serve the credit needs of larger clients. These institutions, particularly to the extent they are more diversified than us, may be able to offer the same loan products and services that we offer at more competitive rates and prices. If we are unable to attract and retain banking clients, we may be unable to resume the Bank’s loan and deposit growth when circumstances permit and our business, financial condition and prospects may be negatively affected even if we are successful in addressing our credit related and regulatory issues.

Also, many competitors may be in a stronger competitive position because they are not subject to the same regulatory restrictions as we are and do not have the same level of asset quality issues.

Our prior growth may increase the risk of credit defaults in the future, which would adversely affect our financial condition and results of operation.

The historical growth in our loan portfolio, including past expansions into new markets and the participation in loans outside our markets, increase credit risk. Rapidly growing loan portfolios are, by their nature, less seasoned and may be more adversely affected by the economic recession. Also, estimating loan loss allowances in this type of portfolio is more difficult, and may be more susceptible to changes in estimates, and to losses exceeding estimates, than more seasoned portfolios. In addition, some of our loan participations are in markets

19

more severely affected by the recession. Because of these factors and the slow economic recovery, the current level of delinquencies and defaults may not be representative of the level that will prevail, which may be significantly higher than current levels. As discussed above, a higher rate of delinquencies or defaults on loans than currently anticipated could cause us to increase our provision for loan losses and otherwise negatively affect our financial condition, results of operations and financial prospects.

Liquidity is important to financial institutions, and our financial condition as well as regulatory actions could adversely affect us in this respect.

The ability of a financial institution to make loans, return funds to our depositors as required, and to meet our funding commitments depends to a large measure on a stable deposit base and access to other sources for borrowing such as advances from the Federal Home Loan Bank of Atlanta, overnight federal funds, repurchase agreements and other credit sources. The market factors discussed above, our performance in the difficult economic environment and the actions of regulatory authorities in response to these conditions, such as the Formal Agreement, and including the current regulatory prohibition on the payment of dividends and incurrence of debt, have resulted and may result in further diminished access by us to these liquidity sources, in turn affecting our ability to fund our business.

Recent levels of market volatility were unprecedented and could return.

In recent years, the capital and credit markets have experienced unusually high levels of volatility and disruption, although this appears recently to have stabilized somewhat. In 2008, the volatility and disruption reached unprecedented levels. The markets produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength although it was particularly difficult for issuers lacking underlying financial strength. If these levels of market disruption and volatility return, there can be no assurance that we will not experience an adverse effect, which may be material, on our ability to access additional capital, on dilution to our then existing shareholders if we require additional capital, and on our business, financial condition and results of operations.

We rely heavily on our management team and the unexpected loss of any of those personnel could adversely affect our operations.

We are a customer-focused and relationship-driven organization, and we expect to remain such. But, as we now rely less than before on character and collateral-based lending, we must infuse new credit related policies throughout the organization. This requires the leadership of our senior management team. In addition, the economic recession and associated enhanced regulatory oversight require a management team with dedication and experience to work through the issues we face as a result. We do not have employment agreements with our key employees and this could increase the chance of losing some key employees. However, even if we did have such agreements this would not necessarily assure that we will be able to continue to retain the services of our key employees. The unexpected loss of any of our key employees could have a material adverse effect on our business and possibly result in reduced revenues and earnings and a reduced ability to deliver desired changes in our organization.

We depend on our ability to attract key personnel as we adjust to a changing banking environment and the way we do business.

The economic and regulatory factors we have pointed out and the resulting changes in our policies and culture also may necessitate the hiring of employees having additional expertise particularly in respect to identifying and addressing credit matters affected by the recession and our previous growth and policy changes. We may be unable to attract these persons under existing circumstances and this could impair our ability to satisfy regulatory requirements and restore our earnings to more traditional levels.

We have two trust preferred issues outstanding. We have suspended our payments on these securities to preserve capital and liquidity and comply with the Formal Agreement.

In 2004, we issued $11.3 million in floating rate trust preferred securities offered by NPB Capital Trust I, a wholly owned subsidiary. These securities have a floating rate of three month LIBOR plus 260 basis points which resets quarterly. The current rate at December 31, 2011 is 3.00%. In 2006, we issued an additional $5.2 million in floating rate trust preferred securities offered by NPB Capital Trust 2, a wholly owned subsidiary. Those securities have a floating rate of three month LIBOR plus 177 basis points which resets quarterly. The current rate at December 31, 2011 is 2.17%. These securities mature in 30 years and are redeemable in whole or part, at our option after five years. To preserve capital and liquidity at the Bank, in October 2009, the Federal Reserve prohibited

20

dividends from the Bank to the Company and directed the Company to suspend payments on the trust preferred securities. The current Formal Agreement contains similar dividend prohibitions. We are permitted to defer principal and interest payments on the trust preferred securities for up to five years without causing a default. We believe we will be able to resume principal and interest payments within this window. But if we cannot, we would probably not be able to repay the amounts owed on these securities upon acceleration of their maturity and this could cause a loss of your investment.

The soundness of other financial institutions could adversely affect us.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial industry. Defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions which could affect us. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due us. There is no assurance that any such losses would not materially and adversely affect our results of operations.

Changes in interest rates could have an adverse effect on our income, particularly if we have a period of sustained higher interest rates.

Our profitability depends to a large extent upon our net interest income. Net interest income is the difference between interest income on interest-earning assets, such as loans and investments, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Our net interest income will be adversely affected if market interest rates change so that the interest we pay on deposits and borrowings increases faster than the interest we earn on loans and investments. Changes in interest rates also affect the value of our loans. An increase in interest rates could adversely affect borrowers’ ability to pay the principal or interest on existing loans or reduce their desire to borrow more money. This may lead to an increase in our nonperforming assets or a decrease in loan originations, either of which could have a material and negative effect on our results of operations. Interest rates are highly sensitive to many factors that are partly or completely outside of our control, including governmental monetary policies, domestic and international economic and political conditions and general economic conditions such as inflation, recession, unemployment and money supply. Fluctuations in market interest rates are neither predictable nor controllable and may have a material and negative effect on our business, financial condition and results of operations.

We may not be able to raise additional capital on terms favorable to us or at all.

Changes in capital requirements arising from increased capital ratios imposed by regulatory authorities either upon the banking industry generally or upon us specifically due to asset quality or other factors may require us to raise additional capital beyond the proceeds from this offering. As well, we may need additional capital to support our business or to repay our obligations such as the trust preferred securities referred to above. We may not be able to raise additional funds through the issuance of more common stock or other securities. Even if we are able to obtain additional capital, the sale of more common stock or other securities could significantly dilute your ownership and may be at prices lower than the price at which we are selling the shares in this offering.

Our reputation as a safe and sound financial institution is an important factor in our success and could be damaged by circumstances some of which we do not control.

We, like all financial institutions, have an important stake in our good reputation among customers, investors and other constituencies. Damage to our reputation can occur under many circumstances. Some of these we can control and some, like litigation or regulatory actions, we cannot fully control. Should any such circumstances arise our business could be adversely affected to the extent our reputation is negatively impacted. In this respect, in 2007 our former CEO and a Senior Vice President, without authority, engaged a third party to act as a middleman to buy stock from some of the shareholders who had expressed an interest in selling and to sell that stock to a purchaser who had expressed an interest in buying our stock. Some of the stock was purchased by the middleman at a price less than that paid by the buyer. Subsequently, both employees were terminated and we reimbursed the selling shareholders who did not receive the highest price paid by the buyer for the difference. Our former CEO and Senior Vice President have pled guilty to conspiring to commit insider trading and money laundering. After concluding our investigation, we acted to protect our shareholders and our reputation in the community, but events like these can adversely affect our standing and ultimately our business.

21

Regulatory oversight limits our ability to grow our business and requires us to focus on protection of depositors even if it disadvantages our shareholders.

We are subject to extensive supervision by several governmental regulatory agencies at the federal and state levels. These agencies examine financial and bank holding companies and commercial banks, establish capital and other financial requirements and approve new branches, acquisitions or other changes of control. As a financial institution our ability to establish new banks or branches or make acquisitions is conditioned on receiving required regulatory approvals from the applicable regulators. However, we are subject to even tighter regulatory scrutiny by virtue of the Formal Agreement. While the Formal Agreement is in force we are not likely to be approved for any expansion and we are not likely to seek such approval given our focus on asset quality and credit related issues. In addition, regulatory examination standards - particularly in respect to loans - and capital requirements have been enhanced as a result of the severe economic downturn. This regulatory oversight is intended to protect depositors and not necessarily shareholders. Failure to comply with laws, regulations, policies or standards could result in sanctions by regulatory agencies, civil money penalties and damage to our reputation, which could have a material adverse effect on our business, financial condition and results of operation.

The Bank’s ability to pay dividends and make other payments to the Company is subject to regulatory restrictions. The Company also is restricted from taking on new debt. These restrictions impact the Company’s ability to service obligations and meet operating expenses.

The Company is a separate legal entity from the Bank and our other subsidiaries and the Company does not have significant operations of its own. The Company depends on the Bank’s cash and liquidity as well as dividends paid by it to pay its operating expenses and other obligations. The Formal Agreement imposed restrictions which prevent the Bank from paying dividends or otherwise making payments to the Company which would reduce the Bank’s capital. This adversely impacts the Company because these dividends and payments were a major source of the Company’s income. Consequently, the inability to receive dividends and payments from the Bank adversely affects our financial condition and cash flows. Similarly, the Formal Agreement prevents the Company from taking on new debt without prior regulatory approval. While the bank regulators did approve four new loans in the fourth quarter of 2010 and first quarter of 2011 by two of our directors to enable the Company to meet current obligations and to retire the $4.9 million the Company owed on the Silverton line of credit, there is no assurance that such regulatory approvals will be obtainable in the future should they be needed.

The financial services industry is subject to extensive regulation, which is undergoing major changes.

The financial services industry is subject to extensive regulation, which is undergoing major changes. As a financial services firm, we are subject to financial services laws, regulations, corporate governance requirements, administrative actions and policies in each location in which we operate. In 2009, as many emergency government programs slowed or wound down, global regulatory and legislative focus generally moved to a second phase of broader reform and a restructuring of financial institution regulation. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law by President Obama on July 21, 2010. The Dodd-Frank Act enacts a major overhaul of the current financial institution regulatory system. Compliance with the changes in applicable regulation as a result of the Dodd-Frank Act could materially impact the profitability of our business, the value of assets we hold or the collateral available for our loans, require changes to business practices or force us to discontinue businesses and expose us to additional costs, taxes, liabilities, enforcement actions and reputational risk. Such changes could also result in us becoming subject to stricter capital requirements and leverage limits, and could also affect the scope, coverage, or calculation of capital, all of which could require us to reduce business levels or to raise capital, including in ways that may adversely impact our creditors.

Because of stresses on the FDIC’s Deposit Insurance Fund, the FDIC has recently imposed, and could impose in the future, additional assessments on the banking industry.

The current financial crisis has caused the FDIC’s Deposit Insurance Fund (“DIF”) to fall below required minimums. Because the FDIC replenishes the DIF through assessments on the banking industry, we anticipate that the FDIC will likely maintain relatively high deposit insurance premiums for the foreseeable future. In 2009 the FDIC imposed a special deposit insurance assessment on the banking industry, and there can be no assurance that it will not do so again. It also required banking organizations to “pre-pay” deposit insurance premiums in order to replenish the liquid assets of the DIF, and may impose similar requirements in the future. High deposit insurance premiums and special deposit insurance assessments will adversely affect our profitability.

22

Monetary policy and other economic factors could adversely affect the Bank’s profitability.

Changes in governmental economic and monetary policies, the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) and banking and credit regulations, as well as such other factors as national, state and local economic growth rates, employment rates and population trends, will affect the demand for loans and the ability of the Bank and other banks to attract deposits. The foregoing monetary and economic factors, and the need to pay rates sufficient to attract deposits, may adversely affect our ability to maintain an interest margin sufficient to result in operating profits.

The Emergency Economic Stabilization Act of 2008 and American Recovery and Reinvestment Act of 2009 may not stabilize the United States financial system.

The capital and credit markets have been experiencing volatility and disruption for more than two years, and in some cases the volatility and disruption has reached unprecedented levels. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength.

In response to financial conditions affecting the banking system and financial markets and the potential threats to the solvency of investment banks and other financial institutions, the United States government has taken unprecedented actions. On October 3, 2008, the Emergency Economic Stabilization Act of 2008 was enacted. The primary purpose of the law was to provide relief to the United States economy by giving the United States government the authority to develop programs to increase the supply of credit to the United States economy and to generally stabilize economic conditions. A number of programs were developed under the law, including the Troubled Asset Relief Program (“TARP”) and the related Capital Purchase Program. In order to continue stabilizing the economy and in an effort to encourage economic growth, President Obama signed into law the American Recovery and Reinvestment Act of 2009 on February 17, 2009. This act has several provisions designed to stimulate the economy, and also contains provisions modifying or expanding upon the Emergency Economic Stabilization Act of 2008.

TARP and the related Capital Purchase Program are winding down and many financial institutions that participated in the Capital Purchase Program have repaid their borrowed Capital Purchase Program funds to the Treasury, but many (particularly community banks) have not. So-called TARP banks entering the market in the near future to obtain capital to repay the Capital Purchase Program fund may increase the cost of available capital to us should we also need to obtain capital at the same time even though we did not participate in the TARP program. We also do not know what actual impact the laws and this wind-down will have on the financial markets, including the extreme levels of volatility and limited credit availability currently being experienced. The failure of the laws to help stabilize or stimulate the financial markets and a continuation or worsening of current financial market conditions could materially adversely affect our business, financial condition, results of operations and prospects.

In addition, the Obama Administration issued a white paper, “Financial Regulatory Reform—A New Foundation: Rebuilding Financial Supervision and Regulation,” that provides recommendations for overhauling the nation’s financial regulatory system in the wake of the global financial crisis. The plan urged Congress and regulators to adopt sweeping changes to financial sector regulation and oversight, dramatically increasing the federal government’s role in nearly every aspect of the financial markets. As discussed above, the Dodd-Frank Act enacts a major overhaul of the current financial institution regulatory system although many of the implementing regulations have yet to be finalized. There can be no assurance that the Dodd-Frank Act or any other future legislative or regulatory initiatives will be successful at improving economic conditions globally, nationally or in our markets, or that the measures adopted will not have adverse consequences, including resulting in additional restrictions, oversight or costs that may have an adverse effect on our business, financial condition, results of operations and prospects.

Failure to maintain effective systems of internal and disclosure control could have a material adverse effect on our results of operation and financial condition.

Effective internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. As part of our ongoing monitoring of internal control, we may discover material weaknesses or significant deficiencies in our internal control as defined under standards adopted by the Public Company Accounting Oversight Board (“ PCAOB”), that require remediation. Under the PCAOB standards, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have in

23

the past discovered, and may in the future discover, areas of our internal controls that need improvement. Even so, we are continuing to work to improve our internal controls. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Any failure to maintain effective controls or to timely effect any necessary improvement of our internal and disclosure controls could, among other things, result in losses from fraud or error, harm our reputation or cause investors to lose confidence in our reported financial information, all of which could have a material adverse effect on our results of operation and financial condition.

Our information systems may experience an interruption or security breach.

We rely heavily on communications and information systems to conduct our business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our internet banking, deposit, loan and other systems. While we have policies and procedures designed to prevent or limit the effect of the possible failure, interruption or security breach of our information systems, there can be no assurance that any such failure, interruption or security breach will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failure, interruption or security breach of our communications and information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny or expose us to civil litigation and possible financial liability.

Factors Related to the Offering and Ownership of Common Stock and Warrants

There are substantial limits on your ability to resell the shares because there is limited trading in our common stock. You may not be able to sell your shares quickly or easily.

Our stock is not listed on a national exchange at this time, although our common stock is quoted on the OTCBB Pink Sheets under the symbol “NWPP”. We can give no assurance that our common stock will ever be listed on NASDAQ or anywhere else. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. We cannot assure you that you will be able to sell your shares of common stock should you need to liquidate your investment. Before purchasing you should consider the limited trading market for the shares and be financially prepared and able to hold your shares for an indefinite period.

The shares and warrants are not a deposit account and are not insured.

The shares and warrants do not constitute bank deposit accounts and are not insured or guaranteed by the FDIC or by any other governmental agency.

Even if the Maximum Offering Amount is subscribed, we cannot assure you that this offering will provide enough capital for us to maintain a “well-capitalized” regulatory capital classification or fully fund our operations in the near-, mid- or long-term.

Our ability to maintain our “well-capitalized” regulatory capital classification is dependent on a number of factors, such as asset quality and earnings, and some of these are affected by events beyond our control. Deterioration in any of these factors could cause us to lose this classification and require us to attempt to obtain additional capital even if we receive subscriptions for the Maximum Offering Amount in this offering.

You cannot revoke your subscription for any reason.

You may not revoke or change your decision to purchase shares in this offering after you submit your subscription to us, including eligible shareholders who have exercised their subscription rights. We have no obligation to allow shareholders or investors to rescind, modify, or reconsider submitted subscriptions for any reason, including materially adverse changes in our business, results of operations, or financial condition subsequent to subscription.

The future price of the shares of common stock may be less than the $1.50 subscription price per share in the offering.

If you purchase shares in the rights offering or public offering, you may not be able to sell the shares later at or above the purchase price per share in the offering allocable to each share of common stock. The actual market price of our common stock could be subject to wide fluctuations in response to numerous factors, some of which are beyond our control. These factors include, among other things, actual or anticipated variations in our costs of doing business, operating results and cash flow, the nature and content of our earnings releases and our competitors’ earnings releases, changes in financial estimates by securities analysts, business conditions in our markets and the

24

general state of the securities markets and the market for other financial stocks, changes in capital markets that affect the perceived availability of capital to companies in our industry, governmental legislation or regulation, currency and exchange rate fluctuations, as well as general economic and market conditions, such as downturns in our economy and recessions.

Once you subscribe, you may not revoke your subscription. If you subscribe and, afterwards, the public trading market price of our shares of common stock decreases below the subscription price, you will have committed to buying the shares, exclusive of the value of the warrants at a price above the prevailing market price of our shares of common stock and may have an immediate unrealized loss. We cannot assure you that the market price of our shares of common stock will not decline after you subscribe. Moreover, we cannot assure you that following the acquisition of shares in the offering you will be able to sell your common stock at a price equal to or greater than the subscription price.

The subscription price of the shares in this offering has been determined by our board of directors and does not necessarily represent the price at which a buyer can be found for the shares now or in the future.

Our board of directors (excluding directors Keene and White who will receive the Conversion Shares) determined the subscription price after considering a number of factors, including: the need to offer the shares at a price that would be attractive to investors, historical and current trading prices for our common stock, general conditions in the financial services industry, the need for capital, and alternatives available to us for raising capital, potential market conditions, and the receipt of a fairness opinion of S&S delivered on March 19, 2012. In conjunction with its review of these factors, the board of directors also reviewed our history and prospects, including our past and present earnings, our prospects for future earnings, and the outlook for our industry, our current financial condition and regulatory status and a range of discounts to market value represented by the subscription prices in prior offerings of other financial institutions.

We retained S&S to provide financial advisory services in connection with the offering, including the rendering of a fairness opinion to our board of directors. S&S delivered its fairness opinion to our board of directors on March 19, 2012. As part of its analysis, S&S, among other things, reviewed certain business, financial and other information regarding us and our prospects that were furnished to S&S by us, reviewed the publicly reported historical price and trading activity for our common stock, compared the business, financial and other information regarding us with similar information concerning certain other comparable companies, compared the proposed financial terms of the offering with the financial terms of various other offerings of financial institutions in recent years, reviewed the pro forma financial impact of the offering, and considered other information such as financial studies, analyses and investigations as well as financial, economic and market criteria that S&S deemed relevant. In addition, S&S had discussions with management and other representatives and advisors concerning our business, financial condition, results of operations and forecast. In rendering its opinion to our board of directors, S&S stated that, as of the date of the opinion, the consideration to be received by us for each share was fair, from a financial point of view, to us and the subscription price was fair, from a financial point of view, to our shareholders.

As a result, the subscription price is not necessarily a reflection of the market price at which our common stock may sell after the offering or of any intrinsic or fair value of our common stock.

The fairness opinion is not a recommendation to the Company, shareholders, or investors.

The fairness opinion is largely based on data, assumptions, and projections about our business and current and future financial condition, results of operations, asset quality, and business prospects provided by us to S&S. Any inaccuracy or incompleteness in our data, assumptions, and projections provided to S&S could have affected the opinions expressed by S&S in the fairness opinion, including the opinions that the consideration to be received by us in the offering was fair, from a financial point of view, to the Company, and that the subscription price was fair, from a financial point of view, to the shareholders (other than directors Keene and White).

Banking is a highly regulated industry and bank regulators are granted broad discretionary powers that could negatively affect an investment in the shares.

Banking regulators have broad and largely discretionary powers over regulated financial institutions, including us. Regulatory powers over financial institutions extend to, without limitation, matters relating to capital investment and corporate governance that, at less regulated entities, usually are at the discretion of boards of directors or subject to shareholder approval. These matters include, among other things, whether and when to raise capital, limitations on dividends and distributions and removal of officers and directors. The highly regulated nature of the banking industry could negatively affect an investment in the shares.

25

In addition, any or all of our investors may be required, in connection with applications for regulatory approvals filed by us with bank supervisory agencies and other regulatory authorities, to provide such information as may be requested by such agencies and authorities, including, without limitation, information about such investor, its business and activities, its principal officers, its shareholders and investors, its financial performance and condition and information relating to its investment in us, including its source of funds, and information relating to certain other investments.

Our directors and officers have significant voting power and could have the ability to influence shareholder actions in a manner that may be adverse to your personal investment objectives.

Our directors and executive officers currently own directly and beneficially 9.90% of our outstanding shares (on a fully-diluted basis). Immediately following the offering, we expect our directors and executive officers will beneficially own approximately 6,169,095 shares, or 20.23%, of our common stock beneficially owned assuming the Maximum Offering Amount and including 186,943 vested stock options granted, 859,995 stock warrants and approximately 30.10%, of our common stock beneficially owned assuming the Minimum Offering Amount and including the 186,943 vested stock options granted, and 859,995 stock warrants.

Because of the percentage of stock held by our directors and executive officers, these persons could influence the outcome of any matter submitted to a vote of our shareholders. The interests of our directors and executive officers may not align precisely with your interest as a holder of our common stock. Due to their significant ownership interests, our directors and executive officers will be able to exercise significant control over our management and affairs. For example, our directors and executive officers may be able to influence the outcome of director elections or block significant transactions, such as a merger or acquisition, or any other matter that might otherwise be approved by the shareholders.

If the offering is consummated, your relative ownership interest may experience significant dilution.

To the extent that you do not exercise your subscription rights, and other shareholders exercise their subscription rights or acquire shares in the public offering, the percentage that your original shares of common stock represent of our expanded equity will be substantially diluted. You can minimize your dilution by fully exercising your subscription rights and by participating in the public offering. However, you are unlikely to be able to avoid some dilution due to the effect of issuing the Conversion Shares.

Completion of the offering is subject to us selling a minimum of 6,666,667 shares.

Completion of this offering is subject to us selling a minimum of 6,666,667 shares, but we will issue the Conversion Shares regardless of whether we reach this minimum.

Our management will have discretion in allocating the proceeds from this offering.

We will have broad discretion over the use of the net proceeds of this offering. We are conducting the offering to increase our equity capital and improve our capital ratios to strengthen our balance sheet as we continue to resolve and manage our elevated levels of nonperforming assets. Our capital position has been impacted by increases in our provision for loan losses and write downs of our other real estate owned portfolio due to the economic downturn and deteriorating real estate market conditions. As a result, we have reported a cumulative net loss of $21.7 million over the three years ended December 31, 2011. All of our capital ratios currently meet the minimum regulatory capital requirements necessary for us to be considered a “well capitalized” financial institution, although our regulators encourage higher levels. Capitalization of any company is of critical importance, especially during difficult times. We believe that capital requirements may increase in the future due to financial reform legislation. In addition, we are currently operating under the Formal Agreement with the Federal Reserve and the Virginia Bureau. We believe we have made progress in our compliance efforts under the Formal Agreement, and we believe all of the written plans required to date, as discussed in the following paragraph, have been submitted on a timely basis.

Under the terms of the Formal Agreement, the Bank agreed to develop and submit for approval within specified time periods written plans addressing a number of operational and managerial aspects of the Bank and the Company and the Bank agreed to develop and submit a written plan to maintain sufficient capital at New Peoples Bankshares, on a consolidated basis, and the Bank, on a stand-alone basis. For more details, please see “Prospectus Summary - Supervisory Actions.” We expect to use the net proceeds of this offering to increase the Bank’s equity capital, to serve as a buffer for any possible future degradation in the Bank’s loan or asset portfolios, and for general corporate uses. See “Use of Proceeds.”

26

Our board of directors has chosen to include a rights offering as part of the offering to allow existing shareholders the opportunity to purchase additional shares of our common stock based on their pro rata ownership percentage, while giving existing shareholders the opportunity to limit their ownership dilution from a sale of common stock to other shareholders or other investors in the public offering and the issuance of the Conversion Shares.

You should not anticipate or expect the payment of cash dividends on our common stock.

We do not intend to pay cash dividends on our common stock in the foreseeable future. New Peoples Bankshares is a separate and distinct legal entity from New Peoples Bank. We currently intend to retain future earnings to support the growth of our business because our business currently is limited to owning all of the outstanding shares of capital stock of the Bank. Our payment of dividends on the common stock generally will be funded only from dividends received from the Bank. In addition, the payment of dividends may be made only if we and the Bank are in compliance with certain regulatory requirements governing the payment of dividends. Presently, under the Formal Agreement we are prohibited from paying dividends in order to preserve our capital and help insure we can provide financial support to New Peoples Bank.

The subscription rights and warrants cannot be transferred or assigned.

The subscription rights and warrants are not transferable or assignable except by operation of law. Conversion of the warrants into shares of our common stock and the sale of those shares of common stock is the only way for you to liquidate your investment in any warrants you acquire in the offering. If you convert your warrants into common stock, you may be unable to sell the shares of common stock issuable upon such conversion at a price equal to or greater than the conversion price.

We may terminate the offering and return your subscription payments without interest.

We may in our sole discretion decide not to continue with the offering or to terminate the offering at any time. This decision could be based on many factors, including market conditions. We currently have no intention to terminate the offering, but are reserving the right to do so. If we elect to cancel or terminate the offering, neither we nor the subscription agent will have any obligation with respect to the subscription rights except to return, without interest or deduction, any subscription payments the subscription agent received from you.

The offering may cause the price of our common stock to decrease.

The number of shares of common stock that will be issuable if this offering is fully-subscribed, together with the Conversion Shares and any shares of common stock issuable upon the exercise of warrants, may result in an immediate decrease in the market value of our common stock. This decrease may continue after the completion of this offering. If that occurs, you may be unable to profitably sell your common stock. Further, if a substantial number of shares of common stock are issued, and if the holders of the common stock in this offering choose to sell some or all of those shares, the resulting sales could depress the market price of our common stock. There is no assurance that following the offering you will be able to sell your common stock at a price equal to or greater than the subscription price.

There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock.

We may decide to access the capital markets again in the future for a number of reasons. These include the need for capital to meet our obligations such as to repay our trust preferred securities, to maintain our “well- capitalized” regulatory capital classification due to loan losses or other factors, to support strategic or additional growth opportunities or to meet regulatory requirements. We are not restricted from issuing additional common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or any substantially similar securities. The market price of our common stock could decline as a result of sales of shares of common stock or similar securities in the market made after this offering or the perception that such sales could occur.

27

If you do not act promptly and follow the subscription instructions, your exercise of subscription rights may be rejected.

Eligible shareholders who desire to purchase shares of common stock in the rights offering must act promptly to ensure that all required forms and payments are actually received by the subscription agent before 5 p.m., Eastern Time, on [June 15,] 2012, the expiration date of the rights offering, unless the exercise period is extended by us. If you are a beneficial owner of shares of common stock, you must act promptly to ensure that your broker, bank or other nominee acts for you and that all required forms and payments are actually received by the subscription agent before the expiration date of the rights offering. We will not be responsible if your broker, bank or other nominee fails to ensure that all required forms and payments are actually received by the subscription agent before the expiration date of the rights offering. If you fail to complete and sign the required subscription forms, send an incorrect payment amount or otherwise fail to follow the subscription procedures that apply to your exercise in the rights offering, the subscription agent may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received. Neither we nor our subscription agent undertakes to contact you concerning an incomplete or incorrect subscription form or payment, nor are we under any obligation to correct such forms or payment. We have the sole discretion to determine whether a subscription exercise is valid and effective.

The receipt of subscription rights may be treated as a taxable distribution to you.

We believe that the distribution of the subscription rights in this offering and the issuance of the warrants should be non-taxable distributions under Section 305(a) of the Internal Revenue Code. This conclusion, however, is not binding on the Internal Revenue Service, or the courts. For example, if this offering is part of a “disproportionate distribution” under Section 305 of the Internal Revenue Code, your receipt of subscription rights in this offering may be treated as the receipt of a taxable distribution to you equal to the fair market value of the subscription rights. Any such distribution would be treated as dividend income to the extent of our current and accumulated earnings and profits, if any, with any excess being treated as a return of capital to the extent thereof and then as capital gain. Each holder of common stock is urged to consult his, her or its own tax advisor with respect to the particular tax consequences of this offering. See, “Certain U.S. Federal Income Tax Consequences.”

28

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following consolidated summary sets forth our selected financial data for the periods and at the dates indicated. The selected financial data have been derived from our audited financial statements for each of the last five years ended December 31, 2011, 2010, 2009, 2008, and 2007. You should read the detailed financial information and the financial statements included elsewhere and in our 2011 Form 10-K, including our detailed Management’s Discussion and Analysis and Results of Operation, incorporated into this prospectus by reference.

	At and for the years ended December 31:
	2011			2010			2009			2008			2007
Balance Sheet
Total Assets	$	780,384		$	852,627		$	857,910		$	807,898		$	765,951
Gross Loans		597,816			707,794			763,570			721,174			682,260
Allowance for Loan Losses		(18,380	)		(25,014	)		(18,588	)		(6,904	)		(6,620	)
Other Real Estate Owned		15,092			12,346			5,643			2,496			2,051
Deposits		708,315			766,080			760,714			705,688			657,033
Total Borrowings		39,924			45,829			46,779			47,991			58,930
Shareholders’ Equity		28,873			37,523			46,619			50,323			45,249
Summary of Operations
Interest Income	$	41,769		$	48,028		$	50,378		$	52,317		$	51,447
Interest Expense		9,606			13,898			18,563			23,095			25,738
Net Interest Income		32,163			34,130			31,815			29,222			25,709
Provision for Loan Losses		7,959			22,328			12,841			1,500			3,840
Noninterest Income		5,524			5,934			5,449			5,550			4,651
Noninterest Expense		39,422			31,894			29,847			26,619			23,674
Net Income before Taxes		(9,694	)		(14,158	)		(5,424	)		6,653			2,846
Income Tax Expense (Benefit)		(784	)		(5,093	)		(1,738	)		1,916			(24	)
Net Income (Loss)	$	(8,910	)	$	(9,065	)	$	(3,686	)	$	4,737		$	2,870
Per Share Data
Book Value	$	2.88		$	3.75		$	4.66		$	5.03		$	4.54
Tangible Book Value		2.87			3.31			4.21			4.56			4.06
Net Income (Loss), Basic		(0.89	)		(0.91	)		(0.37	)		0.47			0.29
Net Income (Loss), Diluted		(0.89	)		(0.91	)		(0.37	)		0.46			0.28
Basic Shares Outstanding		10,010,178			10,009,468			10,008,943			9,980,348			9,957,949
Diluted Shares Outstanding		10,010,178			10,009,468			10,008,943			10,234,909			10,371,577
Profitability
Return (Loss) on Average Assets		(1.07	%)		(1.05	%)		(0.44	%)		0.61	%		0.42	%
Return (Loss) on Average Equity		(24.35	%)		(19.60	%)		(7.37	%)		9.98	%		6.60	%
Net Interest Margin (1)		4.29	%		4.35	%		4.14	%		4.13	%		4.11	%
Efficiency Ratio		104.63	%		79.28	%		80.10	%		76.55	%		77.98	%
Liquidity Ratios
Total Loans to Deposits		84.40	%		92.39	%		100.38	%		102.19	%		103.84	%
Noninterest Bearing Deposits to Total Deposits		15.48	%		11.46	%		11.61	%		13.53	%		12.74	%
Nonbrokered Deposits to Total Deposits		98.46	%		97.41	%		96.68	%		98.96	%		100.00	%
Capital Adequacy Ratios
Total Equity to Total Assets		3.70	%		4.40	%		5.43	%		6.23	%		5.91	%
Leverage Ratio		4.23	%		4.62	%		6.14	%		7.72	%		7.22	%
Tier 1 Capital		6.57	%		6.54	%		8.12	%		9.50	%		8.73	%
Total Risk-Based Capital		9.15	%		8.87	%		9.83	%		10.78	%		10.29	%
Asset Quality Ratios
Net Charge-Offs to Average Loans		2.24	%		2.14	%		0.15	%		0.17	%		0.34	%
Nonperforming Loans to Total Loans		7.33	%		6.71	%		3.74	%		0.89	%		0.47	%
Nonperforming Assets to Total Assets		7.60	%		7.02	%		3.99	%		1.11	%		0.69	%
Allowance for Loan Losses to Gross Loans		3.07	%		3.53	%		2.43	%		0.96	%		0.97	%
Allowance for Loan Losses to Nonperforming Loans		41.94	%		52.69	%		65.02	%		107.09	%		206.04	%
Other Data
Number of Branch Offices		27			27			31			31			30
Number of Employees		312			362			367			377			371

(1) Net interest margin is calculated as tax-equivalent net interest income divided by average earning assets and represents our net yield on our earning assets.

29

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus discuss future expectations or state other “forward-looking” information. Those statements could be affected by known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those contemplated by the 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;

• achieving and maintaining compliance with the Formal Agreement among us and the Federal Reserve and the Virginia Bureau ;

• 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;

• any substantial increase in nonperforming loans;

• our ability to attract additional talent that we may need;

• any required increase to our loan loss reserve;

• the difficult market conditions in our industry;

• the unprecedented levels of market volatility;

• the effects of soundness of other financial institutions;

• the uncertain outcome of recently enacted legislation to stabilize the U.S. financial system;

• the potential impact on us of recently enacted legislation;

• the lack of a market for our common stock;

• the ability to successfully manage our growth or implement our growth strategies if we are unable to identify attractive markets, locations or opportunities to expand in the future;

• success in increasing capital to support our financial condition resulting from the recession;

• in the near future, achieving the cost savings we project without customer rejection as we close unprofitable branches, and, in the longer term maintaining cost controls and asset qualities as we open or acquire new branches;

• the successful management of interest rate risk;

• changes in interest rates and interest rate policies;

• reliance on our management team, including our ability to attract and retain key personnel;

• changes in general economic and business conditions in our market area;

• risks inherent in making loans such as repayment risks and fluctuating collateral values;

• competition with other banks and financial institutions, and companies outside of the banking industry, including those companies that have substantially greater access to capital and other resources;

• demand, development and acceptance of new products and services;

• problems with technology utilized by us;

• changing trends in customer profiles and behavior;

• changes in governmental regulations, tax rates and similar matters; and

• other risks which may be described in our future filings with the SEC.

We do not promise to update forward-looking information to reflect actual results or changes in assumptions or other factors that could affect those statements.

30

USE OF PROCEEDS

We will receive $25,000,000.50 in proceeds if the Maximum Offering Amount is sold. If we sell the Minimum Offering Amount, we will receive $10,000,000.50 in proceeds.

We expect to incur approximately $300,000 in offering expenses which include legal, consulting, accounting, printing and mailing and other expenses associated with the offering. While we consider our cost estimates to be reasonable, the actual amounts paid for offering expenses could be materially higher.

Our management will retain broad discretion in deciding how to allocate the proceeds of this offering. We expect, however, that the proceeds of this offering, after deducting offering expenses, will be applied to increase the Bank’s equity capital, to serve as a buffer for any possible future degradation in the Bank’s loan or asset portfolios, and for general corporate uses. Before we apply any of the proceeds for any of these uses, we likely will temporarily invest them in short-term investment securities. The precise amounts and timing of the application of proceeds will depend upon our funding requirements, the funding and capital requirements of the Bank, and whether we have funds available from other sources that we can use for any of those purposes.

Although we meet the minimum standards to be “well-capitalized” for regulatory purposes, our capital plan provides for increasing our level of capital in light of current market conditions, and the related impact on our financial condition. Our capital position has been impacted by increases in our provision for loan losses due to the overall economy and deteriorating real estate market conditions. We have not otherwise made a specific allocation for the use of the proceeds.

DETERMINATION OF SUBSCRIPTION PRICE

The subscription price for a share of our common stock is $1.50.

In determining the subscription price, our board of directors (excluding directors Keene and White who will receive the Conversion Shares) considered a number of factors, including: the need to offer the shares at a price that would be attractive to investors, historical and current trading prices for our common stock, general conditions in the financial services industry, the need for capital, and alternatives available to us for raising capital, potential market conditions, and the receipt of a fairness opinion of S&S delivered on March 19, 2012. In conjunction with its review of these factors, the board of directors also reviewed our history and prospects, including our past and present earnings, our prospects for future earnings, and the outlook for our industry, our current financial condition and regulatory status and a range of discounts to market value represented by the subscription prices in prior offerings of other financial institutions.

The subscription price does not necessarily bear any relationship to any book value of our assets, net worth, past operations, net income, cash flows, losses, financial condition, or other established criteria for value. You should not consider the subscription price as an indication of our value or the value of our common stock. You should not assume or expect that, after the offering, our common stock will trade at or above the subscription price in any given time period. The market price of our common stock may decline during or after the offering. You may not be able to sell the shares of our common stock purchased during the offering at a price equal to or greater than the subscription price, and the market price for our common stock may be lower than the exercise price of the warrants. You should obtain a current quote for our common stock before subscribing and make your own assessment of our business and financial condition, our prospects for the future, and the terms of this offering.

Financial Advisor

We retained S&S to provide financial advisory services to us in connection with the offering, including the rendering of a fairness opinion to our board of directors. S&S is an investment banking firm with significant experience in advising financial institutions. In the ordinary course of its investment banking business, S&S is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

S&S delivered its fairness opinion to our board of directors on March 19, 2012. As part of its analysis, S&S, among other things, reviewed certain business, financial and other information regarding us and our prospects that were furnished to S&S by us, reviewed the publicly reported historical price and trading activity for our common stock, compared the business, financial and other information regarding us with similar information concerning certain other comparable companies, compared the proposed financial terms of the offering with the financial terms of various other offerings of financial institutions in recent years, reviewed the pro forma financial impact of the offering, and considered other information such as financial studies, analyses and investigations as

31

well as financial, economic and market criteria that S&S deemed relevant. In addition, S&S had discussions with management and other representatives and advisors concerning our business, financial condition, results of operations and forecast. In rendering its opinion to our board of directors, S&S stated that, as of the date of the opinion, the consideration to be received by us for each share was fair, from a financial point of view, to us and the subscription price was fair, from a financial point of view, to our shareholders [(other than directors Keene and White)].

We have attached the full text of S&S’s opinion as Annex A to this prospectus. You should read the entire opinion to understand the assumptions made, matters considered, and limitations on the review undertaken by S&S. S&S has not prepared any report or opinion constituting a recommendation or advice to us or our shareholders. S&S expresses no opinion and makes no recommendation to holders of the subscription rights or to other investors as to the purchase by any person of shares of our common stock. S&S also expresses no opinion as to the prices at which shares to be distributed in connection with the offering may trade if and when they are issued or at any future time. The opinion does not constitute a recommendation as to whether you should exercise your rights in the rights offering or acquire shares in the public offering.

We have agreed to pay S&S a fee of $100,000 in connection with the fairness opinion, which payment is not conditioned on consummation of the offering or subscription for a certain number of shares. In addition, we will pay S&S advisory fees in connection with the rendering of financial advisory and general investment banking services in the amount of $150,000 plus reimbursement of expenses in the amount of $33,839.36.

S&S will not participate in the solicitation of subscriptions for our common stock. S&S has no obligation to take or purchase any shares of common stock in connection with the offering.

We have agreed to indemnify S&S against certain liabilities and expenses in connection with its engagement, including certain potential liabilities under the federal securities laws.

S&S may in the future provide other investment banking services to us and will receive compensation for such services.

32

MARKET FOR COMMON STOCK AND DIVIDEND INFORMATION

Our stock is not listed on a national exchange at this time, although our common stock is quoted on the OTCBB Pink Sheets under the symbol “NWPP.” If you want to sell your shares, you will need to find a buyer and negotiate the price unless and until we list our stock and a market develops. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. We can give no assurance that our common stock will ever be listed on NASDAQ or anywhere else. The development of an active trading market, whether or not a stock is reported on an exchange, depends on the existence of willing buyers and sellers. Moreover, should an active trading market develop there can be no assurance that our common stock will trade for prices at or above the price at which the common stock is offered in this offering.

The high and low prices at which our common stock has traded known to us for each quarter in the past two years are set forth in the table below. These prices are obtained through inquiry by our stock transfer agent of shareholders transferring stock. Other transactions may have occurred at prices about which we are not aware.

	2012		2011				2010
	High	Low	High		Low		High		Low
1st quarter	$	$	$	10.00	$	4.00	$	10.00	$	6.67
2nd quarter				5.00		5.00		10.00		6.00
3rd quarter				3.00		3.00		10.00		6.00
4th quarter				3.00		3.00		8.00		4.00

The most recent sales price of which management is aware was $3.00 per share on February 6, 2012.

On                     , 2012, there were approximately 4,431 shareholders of record.

In order to preserve capital to support our growth in the past we have not paid cash dividends. The declaration of dividends in the future will depend on our earnings and capital requirements and compliance with regulatory mandates. We are subject to certain restrictions imposed by the reserve and capital requirements of federal and Virginia banking statutes and regulations. Moreover, the Formal Agreement we have with the banking regulators prohibits the Company from paying any cash dividends and the Bank’s ability to pay dividends to the Company. So long as these restrictions remain in place the Company will not pay any cash dividends. Thereafter, the Company may or may not pay cash dividends depending on various factors including capital needs, earnings, and other factors our board of directors deems relevant. As a result, we do not anticipate paying a dividend on our common stock in 2012 or 2013. See Note 3, Note 16 and Note 23 of the Notes to the Consolidated Financial Statements included in the December 31, 2011 Form 10-K incorporated by reference for further discussion of dividend limitations and capital requirements.

33

CAPITALIZATION

The following table sets forth the capitalization and certain capital ratios as of December 31, 2011. Our capitalization is presented on an actual basis and on an as adjusted basis to reflect (i) the sale of the Minimum Offering Amount (6,666,667 shares) and (ii) the sale of the Maximum Offering Amount (16,666,667 shares), in each case including the effect of the conversion of $5.45 million in loans owed by the Company to two directors into the Conversion Shares. The table is based on proceeds.

	As of December 31, 2011
($ in thousands, except per share amounts)				As Adjusted
	Actual			Minimum $10,000,000.50			Maximum $25,000,000.50
Short-Term Debt:
Capital Notes	$	5,450		$	—		$	—
Long-Term Debt:
Trust Preferred Securities		16,496			16,496			16,496
Stockholders’ Equity:
Common Stock, $2.00 par value; authorized 50,000,000 shares; 10,010,178 shares issued and outstanding at December 31, 2011; 20,310,178 pro forma for minimum; 30,310,178 pro forma for maximum		20,020			40,620			60,620
Additional Paid-in Capital and Warrants		21,689			16,539			11,539
Accumulated Other Comprehensive Loss		249			249			249
Retained Earnings		(13,085	)		(13,085	)		(13,085	)
Total Stockholders’ Equity	$	28,873		$	44,323		$	59,323
Total Capitalization	$	50,819		$	60,819		$	75,819
Per Share:
Book Value per Share	$	2.88		$	2.18		$	1.96
Tangible Book Value per Share	$	2.87		$	2.18		$	1.95
Capital Ratios:
Tier 1 Leverage Ratio		4.23	%		6.68	%		8.56	%
Tier 1 Risk-Based Capital Ratio		6.57	%		10.68	%		13.94	%
Total Risk-Based Capital Ratio		9.15	%		12.23	%		15.22	%
Tangible Equity to Tangible Assets (period-end)		3.68	%		5.59	%		7.35	%

⁽¹⁾ The closing date of the offering is not known as of the date of this prospectus. Consequently, the amount of accrued interest on the capital notes that will be outstanding as of the closing date, and the number of Conversion Shares into which that interest will be convertible, are also not known as of the date of this prospectus. Therefore, the portion of the Conversion Shares related to accrued interest is not reflected in this table.

⁽²⁾ Assumes proceeds invested in cash with a zero risk-weightings.

⁽³⁾ Assumes proceeds added to average assets at period-end.

34

THE OFFERING

Overview

The offering is for up to the Maximum Offering Amount of 16,666,667 shares of our common stock or $25,000,000.50, in a rights offering and a public offering. Except for the Conversion Shares, we must accept subscriptions in the rights offering and public offering for at least the Minimum Offering Amount, or 6,666,667 shares in order to close the offering and release the subscription proceeds from escrow. We will terminate the offering and refund all subscriptions if we do not sell the Minimum Offering Amount pursuant to the rights offering and the public offering by [September 15,]2012 (or such later date to which we may extend the offering, but not beyond [December 31,] 2012). Members of our board of directors have committed to purchase 666,667 shares (or $1,000,000.50) for purposes of reaching subscriptions for the Minimum Offering Amount, but will not be issued unless we have sufficient subscriptions for the Minimum Offering Amount. The rights offering consists of the Basic Subscription Privilege and Over-Subscription Privilege as described below. Shareholders of record on the record date for the rights offering will be entitled to participate. Also, as discussed below, we are issuing at no additional charge warrants entitling shareholders and investors who acquire shares in the offering to purchase an additional share at the price of $1.75 per whole share for every five shares acquired in the offering on the terms outlined below.

Reasons for the Offering

We are conducting the offering to increase our equity capital and improve our capital ratios to strengthen our balance sheet as we continue to resolve and manage our elevated levels of nonperforming assets. Our capital position has been impacted by increases in our provision for loan losses and write downs of our other real estate owned portfolio due to the economic downturn and deteriorating real estate market conditions. As a result, we have reported a cumulative net loss of $21.7 million over the three years ended December 31, 2011. All of our capital ratios currently meet the minimum regulatory capital requirements necessary for us to be considered a “well capitalized” financial institution, although our regulators encourage higher levels. Capitalization of any company is of critical importance, especially during difficult times. We believe that capital requirements may increase in the future due to financial reform legislation. In addition, we are currently operating under the Formal Agreement with the Federal Reserve and the Virginia Bureau. We believe we have made progress in our compliance efforts under the Formal Agreement, and we believe all of the written plans required to date, as discussed in the following paragraph, have been submitted on a timely basis.

Under the terms of the Formal Agreement, the Bank agreed to develop and submit for approval within specified time periods written plans addressing a number of operational and managerial aspects of the Bank and the Company and the Bank agreed to develop and submit a written plan to maintain sufficient capital at New Peoples Bankshares, on a consolidated basis, and the Bank, on a stand-alone basis. For more details, please see “Prospectus Summary - Supervisory Actions.” We expect to use the net proceeds of this offering to increase the Bank’s equity capital, to serve as a buffer for any possible future degradation in the Bank’s loan or asset portfolios, and for general corporate uses. See “Use of Proceeds.”

Our board of directors has chosen to include a rights offering as part of the offering to allow existing shareholders the opportunity to purchase additional shares of our common stock based on their pro rata ownership percentage, while giving existing shareholders the opportunity to limit their ownership dilution from a sale of common stock to other shareholders or other investors in the public offering and the issuance of the Conversion Shares.

The Rights Offering

We are providing to the record holders of our common stock as of 5:00 p.m., Eastern Time, on                     , 2012, non-transferable subscription rights to purchase shares of our common stock at a price of $1.50 per share. The subscription rights entitle the eligible shareholders to purchase an aggregate of approximately 16,666,667 shares of our common stock for an aggregate purchase price of $25,000,000.50 million exclusively until the expiration or termination of the rights offering.

Each holder of record of our common stock as of 5:00 p.m., Eastern Time, on                     , 2012 will be entitled to exercise the Basic Subscription Privilege and Over-Subscription Privilege constituting the rights offering as described below. We may cancel the rights offering at any time for any reason before the rights offering expires. If we cancel the rights offering, we will file a Form 8-K notifying shareholders of the cancellation, and the subscription agent will return all subscription payments to the subscribers, without interest or penalty, as soon as practicable.

35

Basic Subscription Privilege

Eligible shareholders will receive one Basic Subscription Privilege for each share of our common stock held on the record date. You may purchase 1.665 Shares of our common stock per Basic Subscription Privilege, subject to delivery of the required documents and payment of the subscription price of $1.50 per share, before the rights offering expires. You may exercise all or a portion of your Basic Subscription Privileges, or you may choose not to exercise any of your subscription rights. If you do not exercise all of your Basic Subscription Privileges in full, you will not be entitled to purchase any shares under your Over-Subscription Privilege.

Fractional shares resulting from the exercise of Basic Subscription Privileges will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the subscription agent will be returned, without interest, as soon as practicable following the expiration of the rights offering.

If, when and after we receive subscriptions for the Minimum Offering Amount (but not prior to the expiration of the rights offering) we may elect (but we are not required) to issue the shares subscribed for in the offering on one or more occasions until we reach the Maximum Offering Amount or the offering expires or we cancel it, whichever occurs first, at which time we will issue the shares not previously issued as soon as practicable afterward.

Over-Subscription Privilege

If you purchase all of the shares available to you pursuant to your Basic Subscription Privileges, you may also choose to purchase a portion of any shares that other shareholders do not purchase by exercising their Basic Subscription Privilege. If sufficient shares are available, we will seek to honor the over-subscription requests in full. If over-subscription requests exceed the number of shares available, however, we will allocate the available shares pro rata among the shareholders exercising the Over-Subscription Privilege in proportion to the number of shares of our common stock that you and the other subscription rights holders have agreed to purchase by exercising the Basic Subscription Privilege. If this pro rata allocation results in any shareholder receiving a greater number of shares than the shareholder subscribed for pursuant to the exercise of the Over-Subscription Privilege, then that shareholder will be allocated only that number of shares for which the shareholder oversubscribed. We will allocate the remaining shares among all other shareholders exercising the Over-Subscription Privilege. If you are not allocated the full amount of shares for which you over-subscribe, you will receive a refund, without interest or penalty, of the subscription price that you delivered for those shares of our common stock that are not allocated to you. The subscription agent will mail such refunds as soon as practicable after the completion of the offering.

To properly exercise your Over-Subscription Privilege, you must deliver to the subscription agent the subscription payment related to your Over-Subscription Privilege before the rights offering expires. Because we will not know the total number of unsubscribed shares before the rights offering expires, if you wish to maximize the number of shares you purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares that may be available to you (i.e. the aggregate payment for both your Basic Subscription Privileges and for any additional shares you desire to purchase pursuant to your Over-Subscription Privilege). You should indicate on your rights certificate, or the form provided by your nominee if your shares are held in the name of a nominee record holder, how many additional shares you would like to purchase pursuant to your Over-Subscription Privilege).

We can provide no assurances that you will actually be entitled to purchase the number of shares issuable upon the exercise of your Over-Subscription Privilege in full at the expiration of the rights offering. We will not be able to satisfy any orders for shares pursuant to the Over-Subscription Privilege if all of our shareholders exercise their Basic Subscription Privileges in full, and we will only honor an Over-Subscription Privilege to the extent sufficient shares are available following the exercise of Basic Subscription Privileges. In addition, limitations on the amount of shares that may be subscribed for pursuant to the Over-Subscription Privilege are described below under the heading “Limitation on the Purchase of Shares.”

To the extent the aggregate subscription price of the actual number of unsubscribed shares available to you pursuant to the Over-Subscription Privilege is less than the amount you actually paid in connection with the exercise of the Over-Subscription Privilege, you will be allocated only the number of unsubscribed shares available to you, and any excess subscription payments will be returned to you, without interest or penalty, as soon as practicable.

To the extent the amount you actually paid in connection with the exercise of the Over-Subscription Privilege is less than the aggregate subscription price of the maximum number of unsubscribed shares available to you pursuant to the Over-Subscription Privilege, you will be allocated the number of unsubscribed shares for which you actually paid in connection with the Over-Subscription Privilege.

36

For example, if (i) there are 100 excess shares available for purchase by three shareholders who have each timely, validly, and fully exercised their Basic Subscription Privileges and (ii) shareholder A requests an additional 100 shares pursuant to shareholder A’s Over-Subscription Privilege, shareholder B requests an additional 70 shares pursuant to shareholder B’s Over-Subscription Privilege, and shareholder C requests an additional 30 shares pursuant to shareholder C’s Over-Subscription Privilege, twice as many excess shares have been requested pursuant to Over-Subscription Privileges as are available, resulting in a pro rata allocation of 50% of each request. In this example, assuming (x) timely and valid exercise of the Over-Subscription Privileges, (y) timely receipt of sufficient payment for the excess shares requested pursuant to such Over-Subscription Privileges, and (z) that the beneficial ownership limitation described below is not applicable, the pro rata allocation would be as follows:

• Shareholder A would receive 50 excess shares pursuant to the Over-Subscription Privilege;

• Shareholder B would receive 35 excess shares pursuant to the Over-Subscription Privilege; and

• Shareholder C would receive 15 excess shares pursuant to the Over-Subscription Privilege.

To properly exercise your Over-Subscription Privilege, you must deliver to the subscription agent the subscription payment related to your Over-Subscription Privilege before the rights offering expires. If you send payment by personal check, payment will not be deemed to have been delivered to the subscription agent until the check has cleared, which may take several days. Because we will not know the total number of unsubscribed shares before the rights offering expires, if you wish to maximize the number of shares you purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares that may be available to you (i.e., the aggregate payment for both your Basic Subscription Privileges and for any additional shares you desire to purchase pursuant to your Over-Subscription Privilege).

Fractional shares resulting from the exercise of the Over-Subscription Privilege will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly.

If, when and after we receive subscriptions for the Minimum Offering Amount (but not prior to the expiration of the rights offering) we may elect (but we are not required) to issue the shares subscribed for in the offering on one or more occasions until we reach the Maximum Offering Amount or the offering expires or we cancel it, whichever occurs first, at which time we will issue the shares as soon as practicable afterward.

Expiration Date and Cancellation of Rights Offering

The subscription period, during which you may exercise your subscription rights, expires at 5:00 p.m., Eastern Time, on [June 15,] 2012, which is the expiration of the rights offering unless we extend that time and date as discussed below. If you do not exercise your subscription rights before that time, your subscription rights will expire and will no longer be exercisable. We will not be required to issue shares to you if the subscription agent receives your rights certificate or your subscription payment after that time although you may participate in the public offering. We have the option to extend the rights offering, although we do not presently intend to do so. We may extend the rights offering by giving oral or written notice to the subscription agent before the rights offering expires, but in no event will we extend the rights offering beyond [August 15,] 2012. If we elect to extend the rights offering, we will file a Form 8-K announcing the extension no later than 9:00 a.m., Eastern Time, on the next business day after the most recently announced expiration date of the rights offering.

If you hold your shares of common stock in the name of a broker, dealer, custodian bank or other nominee, the nominee record holder will exercise the subscription rights on your behalf in accordance with your instructions. Please note that the nominee record holder may establish a deadline that may be before the 5:00 p.m., Eastern Time, [June 15,] 2012 expiration date that we have established for the rights offering.

We may cancel the rights offering at any time and for any reason prior to the time the rights offering expires. If we cancel the rights offering, we will file a Form 8-K notifying shareholders of the cancellation, and the subscription agent will return all subscription payments to subscribers, without interest or penalty, as soon as practicable.

37

Effect of Rights Offering on Existing Shareholders

The ownership interests and voting interests of the existing shareholders will be diluted on account of the issuance of the Conversion Shares, but the extent of that dilution can be reduced by exercising the Basic Subscription Privilege and Over-Subscription Privilege in full. See “Questions and Answers Relating to the Offering.”

How to Exercise Subscription Rights

Subscription by Registered Holders. If you hold a common stock certificate in your own name, the number of shares you may purchase pursuant to your Basic Subscription Privileges is indicated on the enclosed rights certificate. You may exercise your subscription rights by properly completing and executing the rights certificate and forwarding it, together with your full payment, to the subscription agent at the address given below under “Subscription Agent /Information Agent for Rights Offering.” For your subscription to be timely received, your properly completed and executed rights certificate and your full payment must be received by the Subscription Agent before 5:00 p.m., Eastern time, on [June 15,] 2012, unless we extend that time and date (but not beyond [August 15,] 2012). For payment by personal check to be deemed to have been received, the check must have cleared” to be received, and your payment must clear before 5:00 p.m., Eastern Time, on [June 15,] 2012.

Subscription by Beneficial Owners. If you are a beneficial owner of shares of our common stock that are registered in the name of a broker, dealer, custodian bank or other nominee, you will not receive a rights certificate. Instead, the company will issue one subscription right to the nominee record holder on your behalf for every share of our common stock that you own as of the record date. If you are not contacted by your nominee record holder, you should promptly contact your nominee in order to subscribe for shares in the rights offering pursuant to the instructions provided by your nominee. Your nominee record holder may establish a deadline that may be before the expiration of the rights offering.

Payment Method for Subscription Rights

Payments must be made in full in U.S Dollars by personal check drawn on any U.S. bank, including New Peoples Bank, or a cashier’s check drawn only on New Peoples Bank and in either case payable to “Registrar and Transfer Company – New Peoples Escrow Account”, or by wire transfer. See “Subscription Agent/Information Agent for Rights Offering” at page     .

Payment received after the expiration of the rights offering will not be honored, and the subscription agent will return your payment to you, without interest, as soon as practicable. The subscription agent will be deemed to receive payment upon:

• clearance of any personal check deposited by the subscription agent; or

• receipt by the subscription agent of any wire transfer of immediately available funds.

If you send a personal check, payment will not be deemed to have been received by the subscription agent until the check has cleared. The clearinghouse may require five or more business days. Accordingly, holders who wish to pay the subscription price by means of a personal check should make payment sufficiently in advance of the expiration of the rights offering to ensure that the payment is received and clears by that date.

You should read the instruction letter accompanying the rights certificate carefully and strictly follow it. DO NOT SEND RIGHTS CERTIFICATES OR PAYMENTS DIRECTLY TO NEW PEOPLES BANKSHARES. We will not consider your subscription received until the subscription agent has received delivery of a properly completed and duly executed rights certificate and payment of the full subscription amount. The risk of delivery of all documents and payments is borne by you or your nominee record holder, not by the subscription agent or us.

The method of delivery of rights certificates and payment of the subscription amount to the subscription agent will be at the risk of the holders of subscription rights. If sent by mail, we recommend that you send those certificates and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance of payment before the rights offering expires.

38

Medallion Guarantee Will Be Required for Exercise of Subscription Rights

Your signature on your rights certificate must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent, unless:

• you provide on the rights certificate that shares are to be delivered to you as record holder of those subscription rights; or

• you are an eligible institution.

Missing or Incomplete Subscription Forms or Payment

If you fail to complete and sign the required subscription forms or otherwise fail to follow the subscription procedures that apply to the exercise of your subscription rights before the rights offering expires, the subscription agent will reject your subscription or accept it to the extent of the payment received. Neither we nor our subscription agent undertakes any responsibility or action to contact you concerning an incomplete or incorrect subscription form, nor are we under any obligation to correct such forms. We have the sole discretion to determine whether a subscription exercise properly complies with the subscription procedures.

If you send a payment that is insufficient to purchase the number of Shares you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received, subject to the availability of shares under the Over-Subscription Privilege and the elimination of fractional shares. Any excess subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable following the expiration of the rights offering.

Subscription Agent/Information Agent for Rights Offering

The subscription agent and information agent for the rights offering is Registrar and Transfer Company. Please mail or deliver rights certificates and payments to the address provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance or payment before the rights offering expires. Do not send or deliver these materials to us or the Bank. If you have any questions regarding the rights offering, completing a rights certificate or submitting payment in the rights offering, please contact Registrar and Transfer Company.

Registrar and Transfer Company

Attn: Reorg. Department

10 Commerce Drive

Cranford, NJ 07016

(800) 368-5948

Checks for subscription payments should be payable to Registrar and Transfer Company

For wire transfers of subscription payments:

For Benefit Of:	Registrar and Transfer Company
	As Subscription Agent for Various Holders
Account No:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA No:	031-201-360

If you deliver subscription documents or rights certificates in a manner different than that described in this prospectus, we may not honor the exercise of your subscription rights.

39

Notice to Nominees

If you are a broker, custodian bank or other nominee record holder that holds shares of our common stock for the account of others on the record date, you should notify the beneficial owners of the shares for whom you are the nominee of the rights offering as soon as possible to learn their intentions with respect to exercising their subscription rights. You should obtain instructions from the beneficial owners of our common stock. If a beneficial owner of our common stock so instructs, you should complete the rights certificate and submit it to the subscription agent with the proper subscription payment by the expiration date. You may exercise the number of subscription rights to which all beneficial owners in the aggregate otherwise would have been entitled had they been direct holders of our common stock on the record date, provided that you, as a nominee record holder, make a proper showing to the subscription agent by submitting the form entitled “Nominee Holder Certification,” which is provided with your rights offering materials. If you did not receive this form, you should contact us to request a copy.

Beneficial Owners

If you are a beneficial owner of shares of our common stock and will receive your subscription rights through a broker, custodian bank or other nominee record holder, we will ask your nominee to notify you of the rights offering. If you wish to exercise your subscription rights, you will need to have your nominee act for you, as described above. To indicate your decision with respect to your subscription rights, you should follow the instructions of your nominee record holder. If you wish instead to obtain a separate rights certificate, you should contact your nominee as soon as possible and request that a rights certificate be issued to you. You should contact your nominee if you do not receive notice of the rights offering, but you believe you are entitled to participate in the rights offering. We are not responsible if you do not receive the notice by mail or otherwise from your nominee or if you receive notice without sufficient time to respond to your nominee by the deadline established by your nominee, which may be before the 5:00 p.m., Eastern Time, June 15, 2012, expiration date.

Non-Transferability of Subscription Rights

The subscription rights granted to you are non-transferable and, therefore, you may not sell, transfer or assign your subscription rights to anyone. The subscription rights will not be listed for trading on any stock exchange or market. The shares of our common stock issuable upon exercise of the subscription rights will be quoted on the Pink Sheets of the OTC Bulletin Board.

Foreign Eligible Shareholders

We will not mail this prospectus or rights certificates to shareholders with addresses that are outside the United States or that have a military post office or a foreign post office address. The subscription agent will hold these rights certificates for their account. To exercise subscription rights, our foreign shareholders must notify the subscription agent prior to 11:00 a.m., Eastern Time, at least three business days prior to the expiration of the rights offering and demonstrate to the satisfaction of the subscription agent that the exercise of such subscription rights does not violate the laws of the jurisdiction of such shareholder.

U.S. Federal Income Tax Treatment of Rights Distribution

For U.S. federal income tax purposes, you should not recognize income or loss upon receipt or exercise of these subscription rights to purchase our Shares for the reasons described below in “Certain U.S. Federal Income Tax Consequences.”

No Recommendation to Rights Holders

Our board of directors is not, and S&S is not, making a recommendation regarding your exercise of the subscription rights. Eligible shareholders who exercise subscription rights risk investment loss on money invested. The market price for our common stock may decline to a price that is less than the subscription price and, if you purchase shares at the subscription price, you may not be able to sell the shares in the future at the same price or a higher price. You should make your decision based on your assessment of our business and financial condition, our prospects for the future and the terms of this rights offering. Please see “Risk Factors” for a discussion of some of the risks involved in investing in our common stock.

40

Public Offering

Following completion of the rights offering subscription process, we will sell any remaining shares not subscribed in the rights offering in a public offering up to the Maximum Offering Amount. In any event, we will issue the Conversion Shares as registered shares at the termination or closing of the offering, regardless of whether we offer shares to the public. If we receive aggregate subscriptions for at least the Minimum Offering Amount in the rights offering or after it terminates in the public offering, we may elect to issue from time to time the shares for which we have received subscriptions and continue the sale of the remaining unsubscribed shares in the public offering.

Discretion to Accept Subscriptions

We have the right, in our sole discretion, to accept or reject any subscription in the public offering in whole or in part on or before the public offering expiration date. We generally will accept subscriptions in the order in which they are received. To the extent that shares are subscribed by our shareholders in the rights offering, they will reduce the number of shares available for sale in the public offering. As a result, you may not receive any or all of the shares for which you subscribe. We will notify subscribers as soon as practicable following the public offering expiration date as to whether and to what extent their subscriptions have been accepted. If we do not accept all or a portion of a subscription, the subscription agent will return to the subscriber the unaccepted portion of the subscription funds, without interest or penalty.

Expiration Date and Cancellation Rights

Unless we extend it (but not beyond December 31, 2012), the public offering period will expire at the earlier of 5:00 p.m. Eastern Time on September 15, 2012, or the date on which we have accepted subscriptions for all shares remaining for purchase as reflected in the prospectus supplement.

We may cancel the public offering of remaining shares at any time for any reason, including following the expiration date. If we cancel the public offering of any remaining shares of common stock, the subscription agent will return all subscription payments in the public offering promptly, without interest or penalty. We will terminate the public offering if we do not receive subscription in both the rights offering and the public offering (excluding the Conversion Shares) for at least the Minimum Offering Amount. We will issue the Conversion Shares regardless of whether we receive subscriptions for the Minimum Offering Amount.

Escrow Arrangement

Registrar and Transfer Company, the subscription/escrow agent, will hold funds received with an acknowledgement of subscription in a segregated account. The subscription/escrow agent will hold these funds in escrow until such time as we accept the subscription or until the public offering is cancelled.

No Revocation or Change

Once you submit the acknowledgement of subscription and your payment, you will not be allowed to revoke or change your subscription or request a refund of monies paid. All acknowledgements of subscriptions are irrevocable, even if you learn information about us that you consider to be unfavorable. You should not submit an acknowledgement of subscription unless you are certain that you wish to purchase shares of our common stock at the subscription price.

Method of Subscribing

The subscription agent for this offering is Registrar and Transfer Company. Please mail or deliver subscription documents and payments to the address provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance or payment before the public offering expires. Do not send or deliver these materials to us or the Bank. If you have any questions regarding the public offering, completing a rights certificate or submitting payment in the public offering, please contact Registrar and Transfer Company.

Registrar and Transfer Company

Attn: Reorg. Department

10 Commerce Drive

Cranford, NJ 07016

(800) 368-5948

41

Checks for subscription payments should be payable to Registrar and Transfer Company

For wire transfers of subscription payments:
For Benefit of:	Registrar and Transfer Company
	As Subscription Agent for Various Holders
Account No:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA No:	031-201-360

If you deliver subscription documents or rights certificates in a manner different than that described in this prospectus, we may not honor the exercise of your subscription rights.

Limitations on the Number of Shares that May be Purchased in This Offering

As a bank holding company, we are subject to regulation by the Federal Reserve and the Virginia Bureau. The Federal Reserve and the Virginia Bureau have the authority to prevent individuals and entities from acquiring control of us. Under Federal Reserve rules and Virginia law, if you and your affiliates ( as defined in the applicable Federal and Virginia law and regulations) directly or indirectly, or through one or more subsidiaries, or acting in concert with one or more persons or entities, will own more than 25% of our common stock after giving effect to the rights offering, then you will be deemed conclusively to control us and would need to obtain prior approval of the Federal Reserve and Virginia Bureau to complete the purchase. If, after giving effect to the rights offering, and any shares you acquire in the public offering, you and your affiliates (as defined in the applicable Federal law and regulations) will own 10% or more of our common stock, you will be presumed to control us and would need to obtain prior approval of the Federal Reserve to complete the purchase, unless the circumstances support a rebuttal of such presumption. Except for the Conversion Shares, we will not issue shares pursuant to the exercise of Basic Subscription Privileges or Over-Subscription Privileges, or to any investor in the public offering who, in our sole opinion, could be required to obtain prior clearance or approval from or submit a notice to any federal or state bank regulatory authority to acquire, own or control such shares if, as of the date we are to issue shares acquired in the offering ( not earlier than [June 15,] 2012 or later than [September 15,] 2012 (unless we extend the offering but not beyond December 31, 2012) such clearance or approval has not been obtained or any applicable waiting period has not expired. See “The Offering – Limitation on the Purchase of Shares.” You are urged to consult your own legal counsel regarding whether you are required to seek the prior approval of the Federal Reserve and Virginia Bureau in connection with your exercise of subscription rights or before subscribing in the public offering.

As of                     , 2012, a total of 10,010,178 shares of our common stock were issued and outstanding. If the Maximum Offering Amount is purchased in the offering, there will be approximately 30,310,178 shares of our common stock issued and outstanding after the offering. We cannot advise you of the number of shares you will be permitted to purchase without receiving the prior approval of the Federal Reserve. You are urged to consult your own legal counsel regarding whether you are required to seek the prior approval of the Federal Reserve in connection with your purchase of shares.

Directors’ and Executive Officers’ Participation in the Offering

Our directors, as a group, have collectively subscribed for 666,667 shares in the offering, and we expect insider ownership to remain at or above existing levels. In addition, we will issue the Conversion Shares to directors H. Lynn Keene and B. Scott White as a result of the conversion of a total of $5.45 million (plus accrued interest) in unsecured loans extended to the Company by these two directors. In addition, we anticipate that our directors and executive officers may elect to participate in the offering although they are not required to do so. No director or executive officer will acquire shares that will cause his or her ownership to exceed 9.9% of our outstanding common stock, except for directors White and Keene, whose ownership of our shares may exceed that percentage depending on the number of shares subscribed in the offering. If the offering is fully subscribed, our directors have agreed to purchase 666,667 shares of common stock. All purchases by directors and executive offers will be made for investment purposes and not with a view to resale and will be on the same terms and conditions as applicable to any other subscriber in the offering.

42

The following table shows the existing ownership and intended purchases of our current directors including the Conversion Shares.

Directors’ Names	Existing Ownership		Vested Stock Options		Intended Purchase/ Conversion		Intended Stock Warrants
(Number of Shares)
Tim Ball		3,432		13,780		1,333		266
Joe M. Carter		23,660		13,780		667		133
John D. Cox		53,072		13,780		200,000		40,000
Charles H. Gent, Jr.		27,170		10,920		33,333		6,666
Eugene Hearl		1,100		—		1,333		266
Harold Lynn Keene		44,450		8,060		1,833,334		366,666
Frank Kilgore		96,620		10,920		33,334		6,666
Michael McGlothlin		118,267		13,780		250,000		50,000
Fred Meade		38,896		13,780		1,333		266
Jonathan Mullins		1,100		24,671		667		133
B. Scott White		381,929		8,060		1,944,667		388,933
Total Directors shares		789,696		131,531		4,300,000		859,995

Although directors and executive officers will be investing their own money in the offering, our board of directors is making no recommendation regarding your participation in the offering. You are urged to make your decision based on your own assessment of our common stock, our business and the offering. Please see “Risk Factors” for a discussion of some of the risks involved in investing in our common stock.

Method of Subscribing

The subscription agent for this offering is Registrar and Transfer Company. Please mail or deliver rights certificates and payments to the address provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance or payment before the public offering expires. Do not send or deliver these materials to us or the Bank. If you have any questions regarding the public offering, completing a rights certificate or submitting payment in the public offering, please contact Registrar and Transfer Company.

Registrar and Transfer Company

Attn: Reorg. Department

10 Commerce Drive

Cranford, NJ 07016

(800) 368-5948

Checks for subscription payments should be payable to Registrar and Transfer Company

For wire transfers of subscription payments:

For Benefit of:	Registrar and Transfer Company
	As Subscription Agent for Various Holders
Account No:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA No:	031-201-360

43

If you deliver subscription documents or rights certificates in a manner different than that described in this prospectus, we may not honor the exercise of your subscription rights.

Payment Method for Subscriptions

Payments must be made in full in U.S Dollars by personal check drawn on any U.S. bank, including New Peoples Bank, or a cashier’s check drawn only on New Peoples bank and in either case payable to “Registrar and Transfer Company”, or by wire transfer. See “Subscription Agent/Information Agent for Rights Offering” at page     .

Payment received after the expiration of the public offering will not be honored, and the subscription agent will return your payment to you, without interest, as soon as practicable. The subscription agent will be deemed to receive payment upon:

• clearance of any personal check deposited by the subscription agent; or

• receipt by the subscription agent of any wire transfer of immediately available funds.

If you send a personal check, payment will not be deemed to have been received by the subscription agent until the check has cleared. The clearinghouse may require five or more business days. Accordingly, investors who wish to pay the subscription price by means of a personal check should make payment sufficiently in advance of the expiration of the public offering to ensure that the payment is received and clears by that date.

The method of delivery of subscription documents and payment of the subscription amount to the subscription agent will be at the risk of subscribers. If sent by mail, we recommend that you send those documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance of payment before the public offering expires.

No Fractional Shares in the Offering

All shares will be sold at a purchase price of $1.50 per share. We will not issue fractional shares. Fractional shares resulting from the exercise of the Basic Subscription Privileges and the Over-Subscription Privileges will be eliminated by rounding down to the nearest whole shares. Any excess subscription payments received by the subscription agent will be returned, without interest, as soon as practicable.

Validity of Subscriptions in the Offering

We will resolve at our discretion all questions regarding the validity and form of subscriptions, including time of receipt. Our determination will be final and binding. Once made, subscriptions and directions are irrevocable, and we will not accept any alternative, conditional or contingent subscriptions or directions. We reserve the absolute right to reject any subscriptions or directions for any reason. You must resolve any irregularities in connection with your subscriptions before the subscription period expires, unless we waive them in our sole discretion. Neither we nor the subscription agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription will be considered accepted, subject to our right to withdraw or cancel the offering, only when the subscription agent receives the required documents, and the full subscription payment including final clearance of any uncertified check. Our interpretations of the terms and conditions of the offering will be final and binding.

Issuance of Shares in the Offering

If, when and after we receive subscriptions for the Minimum Offering Amount (but not prior to the termination of the rights offering), we may elect (but are not required) to issue the shares subscribed for in the rights and public offering on one or more occasions, until we reach the Maximum Offering Amount, the offering expires or we cancel it.

Return of Funds in the Offering

The subscription agent will hold funds received in payment for shares in a segregated account, unless and until the shares for which such payments were received are issued or the offering expires because subscriptions were not received for the Minimum Offering Amount by the expiration date or we cancel the offering. If the offering is cancelled for any reason, or we fail to obtain subscriptions for the Minimum Offering Amount by the expiration date, all subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

44

Shareholder Rights

You will have no rights as a holder of the shares you purchase in the offering until certificates representing the shares of our common stock are issued to you, or your account at your nominee is credited with the shares purchased in the offering.

Non-Transferable Warrants

The warrants are a new issue of securities. The warrants are not transferable or assignable, except by operation of law. Conversion of warrants into shares of our common stock and the sale of those shares of common stock is the only way for you to liquidate the warrants you acquire in the offering. No fractional warrants will be issued. If you purchase a number of shares that is not a multiple of five, the number of warrants that you receive will be rounded to the nearest whole warrant. For example, if you purchase 15 shares, you will receive three warrants. If, however, you purchase 14 shares, you will receive two warrants.

Shares of Our Common Stock Outstanding After the Offering

As of                     , 2012, 10,010,178 shares of our common stock were issued and outstanding. If the offering is fully subscribed (and the Maximum Offering Amount issued), then an additional 20,300,000 shares of our common stock will be issued and outstanding after the closing of the offering, for a total of 30,310,178 shares of common stock outstanding.

45

PLAN OF DISTRIBUTION

Directors, Executive Officers and Employees

Our directors and executive officers may participate in the solicitation of the exercise of subscriptions for the purchase of common stock. These persons will not receive any commissions or compensation in connection with these activities, other than their normal compensation, but they will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with any solicitation. Other trained employees may assist in the offering in ministerial capacities, providing clerical work or answering questions of a ministerial nature. Other questions of prospective purchasers will be directed to our executive offers and Registrar and Transfer Company, our subscription and information agent. Our other employees have been instructed not to solicit subscriptions for the purchase of shares or to provide advice regarding the same. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the solicitation of subscriptions and the sale of the common stock will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of our common stock.

We have not employed any brokers, dealers or underwriters in connection with the solicitation or exercise of rights in the rights offering or in connection with the public offering, and no commissions, fees or discounts will be paid in connection with the offering.

46

DESCRIPTION OF COMMON STOCK AND WARRANTS

The following description is a summary of the material provisions of our Restated Articles of Incorporation (the “Articles of Incorporation”), and Bylaws, as amended (the “Bylaws”). Copies of the Articles of Incorporation and Bylaws have been filed with the SEC and are incorporated into this prospectus.

General

As of                     , 2012, our authorized capital stock consisted of 50,000,000 shares of common stock, par value $2.00 per share, 10,010,178 of which were outstanding. The issued shares of common stock represent non-withdrawable capital, are not accounts of an insurable type, and are not federally insured.

Common Stock

Voting Rights

Each holder of common shares is entitled to one vote per share held on any matter submitted to a vote of shareholders. There are no cumulative voting rights in the election of directors.

Dividends

Holders of common shares are entitled to receive dividends when and as declared by the board of directors out of funds legally available, subject to certain restrictions imposed by state and federal laws.

No Preemptive or Conversion Rights

Holders of our common shares do not have preemptive rights to purchase additional shares of any class of our stock, and have no conversion or redemption rights.

Calls and Assessments

All of the issued and outstanding common shares are fully paid and non-assessable.

Liquidation Rights

In the event of our liquidation, dissolution or winding up, the holders of common shares (and the holders of any class or series of stock entitled to participate with the common shares in the distribution of assets) shall be entitled to receive, in cash or in kind, our assets available for distribution remaining after payment or provision for payment of our debts and liabilities.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Registrar and Transfer Company.

Warrants Issuable in the Offering

General

Purchasers in the offering will receive a warrant to purchase one additional share of common stock for each five shares purchased. The warrants will be exercisable at a price of $1.75 per whole share.

Exercisability

Each warrant will be immediately exercisable and will expire on the fifth anniversary of the completion of the offering. Warrants may be exercised by completing and returning the Warrant Certificate and Subscription Form to the Warrant Agent (Registrar and Transfer Company), along with payment of the exercise price in U.S. Dollars by personal check drawn on any U.S. bank, including New Peoples Bank, or cashier’s check drawn only on New Peoples Bank, and in other case payable to “Registrar and Transfer Company” or by wire transfer. Warrants may be exercised at any time up to the close of business on the warrant expiration date. After the close of business on the warrant expiration date, unexercised warrants will become void.

47

Subscription Agent for Warrants

The subscription agent for the warrants is Registrar and Transfer Company. Please mail or deliver the warrant exercise documents and payments to the address provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance or payment before the warrants expire. Do not send or deliver these materials to us or the Bank. If you have any questions regarding the warrants, the warrant documents or submitting payment for the exercise of warrants, please contact Registrar and Transfer Company.

Registrar and Transfer Company

Attn: Reorg. Department

10 Commerce Drive

Cranford, NJ 07016

(800) 368-5948

Checks for warrant exercises should be payable to Registrar and Transfer Company

For wire transfers of subscription payments:

For Benefit of:	Registrar and Transfer Company
	As Subscription Agent for Various Holders
Account No:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA No:	031-201-360

If you deliver warrant exercise documents in a manner different than that described in this prospectus, we may not honor the exercise of your warrants.

Adjustments

The exercise price and the number shares underlying the warrants are subject to appropriate adjustment in the event of stock splits, reverse stock splits, stock dividends on our common stock, stock combinations or similar events affecting our common stock. In addition, in the event we consummate any merger, consolidation, sale or other reorganization event in which our common stock is converted into or exchanged for securities, cash or other property, then following such event, the holders of the warrants will/ be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property which the holders would have received had they exercised the warrants immediately prior to the reorganization event.

Fractional Shares

No fractional warrants will be issued. If you purchase a number of shares that is not a multiple of five, the number of warrants that you receive will be rounded to the nearest whole warrant. For example, if you purchase 15 shares, you will receive three warrants. If, however, you purchase 14 shares, you will receive two warrants.

Transferability

Warrants are not transferable or assignable, except by operation of law, and accordingly, will not be listed for trading on any stock exchange.

Warrant Agent

The warrants will be issued pursuant to a Warrant Agreement by and between us and Registrar and Transfer Company, the warrant agent for the warrants.

48

Certain Provisions of Our Articles of Incorporation and Bylaws and Virginia Law

General

Our Articles of Incorporation and Bylaws, as well as Virginia law, contain provisions that could make more difficult an acquisition of us by means of a tender offer, a proxy contest or otherwise. These provisions are expected to discourage specific types of coercive takeover practices and inadequate takeover bids as well as to encourage persons seeking to acquire control to first negotiate with us. Although these provisions may have the effect of delaying, deferring or preventing a change in control, we believe that the benefits of increased protection through the potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company outweigh the disadvantages of discouraging these proposals because, among other things, negotiation of such proposals could result in an improvement of their terms.

Shareholder Approval of Certain Transactions

An amendment of the Corporation’s Articles of Incorporation, a plan of merger or share exchange, a transaction involving the sale of all or substantially all of the Corporation’s assets other than in the regular course of business, and a plan of dissolution must be approved by the vote of a majority of all the votes entitled to be cast on such transactions by each voting group entitled to vote on the transaction at a meeting at which a quorum of the voting group is present, provided that the transaction has been approved and recommended by at least two-thirds of the directors in office at the time of such approval and recommendation. If the transaction is not so approved and recommended by two-thirds of the directors in office, then the transaction must be approved by the vote of eighty percent (80%) or more of all the votes entitled to be cast on such transactions by each voting group entitled to vote on the transaction.

Classified Board of Directors

Our Articles of Incorporation currently provide that the board of directors shall be divided into three classes as nearly equal in number as possible. The members of each class are elected for a term of three years and until their successors are elected and qualified. As a result, approximately one third of the members of the board of directors are elected each year, and two annual meetings are required for our shareholders to change a majority of the members constituting the board of directors.

Removal of Directors

Our Bylaws currently provide that any director may be removed from office at a meeting called expressly for that purpose by the vote of stockholders holding a majority of the shares entitled to vote at an election of directors.

Advance Notification Requirements

Our Bylaws prescribe the procedure that a shareholder must follow to nominate directors or to bring other business before shareholders’ meetings outside of the proxy statement process. For a shareholder to nominate a candidate for director at an annual meeting of shareholders, written notice of nomination must be received by our Corporate Secretary not less than 120 days prior to the first anniversary date of the initial notice given to shareholders of record on the record date for the previous annual meeting by or at the direction of the board of directors, provided, however, that if the annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, such notice shall be required to be given not less than 90 days nor more than 120 days prior to the date set for such annual meeting of shareholders. The notice must describe various matters regarding the nominee and the shareholder giving the notice. For a shareholder to bring other business before an annual meeting of shareholders, written notice must be received by our Corporate Secretary not less than 120 days prior to the first anniversary date of the initial notice given to shareholders of record on the record date for the previous annual meeting by or at the direction of the board of directors; provided, however, that if the annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, such notice shall be required to be given not less than ninety days nor more than 120 days prior to the date set for such annual meeting of shareholders.

Effects of Virginia Anti-Takeover Statutes

The Virginia Stock Corporation Act contains provisions governing “Affiliated Transactions.” Affiliated Transactions include certain mergers and share exchanges, material dispositions of corporate assets not in the ordinary course of business, any dissolution of the corporation proposed by or on behalf of an Interested Shareholder

49

(as defined below), or reclassifications, including reverse stock splits, recapitalizations or mergers of the corporation with its subsidiaries which have the effect of increasing the percentage of voting shares beneficially owned by an Interested Shareholder by more than 5%. For purposes of the Virginia Stock Corporation Act, an “Interested Shareholder” is defined as any beneficial owner of more than 10% of any class of the voting securities of a Virginia corporation. No shareholder currently owns beneficially 10% or more of our outstanding common stock.

Subject to certain exceptions discussed below, the provisions governing Affiliated Transactions require that, for three years following the date upon which any shareholder becomes an Interested Shareholder, a Virginia corporation cannot engage in an Affiliated Transaction with such Interested Shareholder unless approved by the affirmative vote of the holders of two-thirds of the voting shares of the corporation, other than the shares beneficially owned by the Interested Shareholder, and by a majority (but not less than two) of the “Disinterested Directors.” A Disinterested Director means, with respect to a particular Interested Shareholder, a member of a corporation’s board of directors who (i) was a member before the later of January 1, 1988 and the date on which an Interested Shareholder became an Interested Shareholder and (ii) was recommended for election by, or was elected to fill a vacancy and received the affirmative vote of, a majority of the Disinterested Directors then on the board. At the expiration of the three-year period, these provisions require approval of Affiliated Transactions by the affirmative vote of the holders of two-thirds of the voting shares of the corporation, other than those beneficially owned by the Interested Shareholder.

The principal exceptions to the special voting requirement apply to Affiliated Transactions occurring after the three-year period has expired and require either that the transaction be approved by a majority of the Disinterested Directors or that the transaction satisfy certain fair price requirements. In general, the fair price requirements provide that the shareholders must receive the highest per share price for their shares as was paid by the Interested Shareholder for his shares or the fair market value of their shares, whichever is higher. They also require that, during the three years preceding the announcement of the proposed Affiliated Transaction, all required dividends have been paid and no special financial accommodations have been accorded the Interested Shareholder unless approved by a majority of the Disinterested Directors.

None of the foregoing limitations and special voting requirements applies to an Affiliated Transaction with an Interested Shareholder whose acquisition of shares making such person an Interested Shareholder was approved by a majority of the corporation’s Disinterested Directors.

These provisions were designed to deter certain takeovers of Virginia corporations. In addition, the statute provides that, by affirmative vote of a majority of the voting shares other than shares owned by any Interested Shareholder, a corporation may adopt, by meeting certain voting requirements, an amendment to its articles of incorporation or bylaws providing that the Affiliated Transactions provisions shall not apply to the corporation. We have not adopted such an amendment.

The Virginia Stock Corporation Act also contains provisions regulating certain “control share acquisitions,” which are transactions causing the voting strength of any person acquiring beneficial ownership of shares of a public corporation in Virginia to meet or exceed certain threshold percentages (20%, 33.3% or 50%) of the total votes entitled to be cast for the election of directors. Shares acquired in a control share acquisition have no voting rights unless: (i) the voting rights are granted by a majority vote of all outstanding shares entitled to be cast for the election of directors other than those held by the acquiring person or any officer or employee director of the corporation, or (ii) the articles of incorporation or bylaws of the corporation provide that these Virginia law provisions do not apply to acquisitions of its shares. The acquiring person may require that a special meeting of the shareholders be held to consider the grant of voting rights to the shares acquired in the control share acquisition. These provisions were designed to deter certain takeovers of Virginia public corporations. In addition, this statute provides that a corporation’s articles of incorporation or bylaws may provide that such statute does not apply to the corporation. Our Articles of Incorporation and Bylaws do not contain such a provision that makes these provisions inapplicable to acquisitions of our stock.

Indemnification of Directors

As permitted by the Virginia Stock Corporation Act, our Articles of Incorporation contain provisions that permit us to indemnify our directors to the full extent permitted by Virginia law and eliminate the personal liability of our directors and officers for monetary damages to us or our shareholders for breach of their fiduciary duties, except to the extent that Virginia law prohibits indemnification or elimination of liability. These provisions do not limit or eliminate our rights or the rights of any shareholder to seek an injunction or any other non- monetary relief in the event of a breach of a director’s fiduciary duty. In addition, these provisions apply only to claims against a director arising out of his or her role as a director and do not relieve a director from liability if he or she engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities law.

50

The rights of indemnification provided in our Articles of Incorporation are not exclusive of any other rights that may be available under any insurance or other agreement, by vote of shareholders or disinterested directors or otherwise. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC this type of indemnification is against public policy as expressed in the Securities Act of 1933, as amended (the “Securities Act”) and is therefore unenforceable.

51

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

The following discussion is a summary of certain United States federal income tax consequences to U.S. holders (as defined below) of the receipt, ownership and exercise of the subscription rights, shares and warrants acquired pursuant to the terms of this offering, and does not consider all aspects of U.S. federal income taxation that may be relevant to particular U.S. holders in light of their particular circumstances. This discussion is based upon the provisions of the Internal Revenue Code, regulations promulgated under the Internal Revenue Code, and administrative rulings and judicial decisions, in each case as of the date of this offering. These authorities are subject to differing interpretations and may be changed, perhaps retroactively, resulting in United States federal income tax consequences different from those discussed below. We have not sought any ruling from the United States Internal Revenue Service (“IRS”) with respect to the statements made and the conclusions reached in this discussion, and there can be no assurance that the IRS will agree with such statements and conclusions.

This discussion applies only to U.S. holders who acquire shares, subscription rights and warrants in connection with this offering. Further, this discussion assumes that the shares, subscription rights and warrants issued pursuant to this offering will be held as capital assets within the meaning of Section 1221 of the Internal Revenue Code. This summary does not address all tax considerations that may be applicable to your particular circumstances or to you if you are a U.S. holder that may be subject to special tax rules, including, without limitation:

• banks, insurance companies or other financial institutions;

• regulated investment companies;

• real estate investment trusts;

• dealers in securities or commodities;

• traders in securities that elect to use a mark-to-market method of accounting for securities holdings;

• tax-exempt organizations;

• persons liable for alternative minimum tax;

• persons that hold shares of common stock as part of a straddle or a hedging or conversion transaction;

• partnerships or other entities treated as partnerships for United States federal income tax purposes; or

• persons whose “functional currency” is not the United States dollar.

You are a U.S. holder if you are a beneficial owner of shares, subscription rights or warrants and you are:

• an individual citizen or resident of the United States,

• a corporation (or any other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia,

• an estate whose income is subject to United States federal income tax regardless of its source, or

• a trust if it (1) is subject to the primary supervision of a court within the United States and one or more “United States persons,” as defined in the Internal Revenue Code, have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

If a partnership (including any entity treated as a partnership for United States federal income tax purposes) receives subscription rights or holds shares and warrants acquired pursuant to the terms of this offering, the tax treatment of a partner in a partnership generally will depend upon the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to the United States federal income tax consequences of the receipt and ownership of the shares, subscription rights and warrants so acquired.

This discussion addresses only certain aspects of United States federal income taxation. You should consult your own tax advisor regarding the United States federal, state, local, non-U.S. and other tax consequences of receiving, owning, exercising and disposing of subscription rights, shares and warrants received pursuant to the terms of this offering in your particular circumstances.

52

Taxation of Subscription Rights

Receipt of Subscription Rights

Your receipt of subscription rights pursuant to the rights offering (which includes your Basic Subscription Privilege and Over-Subscription Privilege, if applicable) should be treated as a nontaxable distribution with respect to your existing shares of common stock for U.S. federal income tax purposes. The discussion below assumes that the receipt of subscription rights will be treated as a nontaxable distribution.

If the fair market value of the subscription rights you receive is less than 15% of the fair market value of your existing shares of common stock on the date you receive the subscription rights, the subscription rights will be allocated a zero basis for U.S. federal income tax purposes, unless you elect to allocate basis between your existing shares of common stock and the subscription rights in proportion to the relative fair market values of the existing shares of common stock and the subscription rights determined on the date of receipt of the subscription rights. If you choose to allocate basis between your existing shares of common stock and the subscription rights, you must make this election on a statement included with your tax return for the taxable year in which you receive the subscription rights. Such an election is irrevocable.

On the other hand, if the fair market value of the subscription rights you receive is 15% or more of the fair market value of your existing shares of common stock on the date you receive the subscription rights, then you must allocate your basis in your existing shares of common stock between the existing shares of common stock and the subscription rights you receive in proportion to their fair market values determined on the date you receive the subscription rights. If your subscription rights are applicable, or deemed applicable, to your right to receive a warrant to purchase a share of common stock for each five shares you acquire pursuant to this offering, then the tax basis allocated to the subscription rights must be apportioned between the right to acquire shares and the right to receive a warrant in proportion to their values on the date of distribution. For these purposes, the value of a right to acquire 1.665 shares will be that amount which bears the same ratio to the value of a subscription right as the value of 1.665 shares of common stock bears to the value of 1.665 shares of common stock and one warrant to acquire 1/5 of a share of common stock. The value of the right to receive a warrant will be the difference between the value of the subscription right and the right to acquire 1/5 of a share of common stock as determined above.

The fair market value of the subscription rights on the date the subscription rights are distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of the fair market value of the subscription rights on that date. In determining the fair market value of the subscription rights, you should consider all relevant facts and circumstances, including any difference between the subscription price of the subscription rights and the trading price of our common stock on the date that the subscription rights are distributed, the length of the period during which the subscription rights may be exercised and the fact that the subscription rights are non-transferable.

Your holding period in a subscription right will include your holding period in the shares of common stock with respect to which the subscription right was distributed.

Exercise of Subscription Rights and Receipt of Warrants

Generally, you will not recognize gain or loss on the exercise of a subscription right. When you exercise a subscription right to acquire 1.665 shares and a warrant to acquire one share of common stock for each five shares acquired, the subscription price must be allocated between the 1.665 shares of common stock and warrant being acquired on the basis of their fair market values on the date of exercise. Your tax basis in a new share acquired when you exercise your subscription right will be equal to the sum of (i) the portion of the basis of your subscription right allocable to the right to acquire 1.665 shares and (ii) the portion of the subscription price allocable to one share of common stock. Your tax basis in any associated warrant is equal to the sum of (x) the portion of the basis of your subscription right allocable to the right to receive the warrant and (y) the portion of the subscription price allocable to the warrant. The holding period of the share of common stock and warrant acquired when you exercise a subscription right will begin on the date of exercise.

If you subsequently exercise an associated warrant, you will not recognize gain or loss on the exercise, and the share of common stock that you acquire will have a basis equal to your adjusted basis in the warrant plus the amount you paid to exercise the warrant to acquire such share of common stock. The holding period of the share of common stock acquired upon exercise of the warrant will begin on the day the warrant is exercised.

53

Not Exercising Subscription Rights

If you do not exercise your subscription rights, you should not recognize a capital loss for United States federal income tax purposes and any portion of the tax basis in your existing shares of common stock previously allocated to the subscription right not exercised will be re-allocated to the existing common stock.

Taxation of Common Stock

Distributions

Distributions with respect to shares acquired pursuant to the terms of this offering will be taxable as dividend income when actually or constructively received to the extent of our current or accumulated earnings and profits, if any, as determined for United States federal income tax purposes. To the extent that the amount of a distribution exceeds our current and accumulated earnings and profits, the distribution will be treated first as a tax-free return of capital to the extent of your adjusted tax basis of such shares of common stock and thereafter as capital gain.

Subject to certain exceptions for short-term and hedged positions, distributions constituting dividend income received by certain non-corporate U.S. holders, including individuals, in respect of the shares of common stock in taxable years beginning before January 1, 2013 are generally taxed at a maximum rate of 15%. Similarly, subject to similar exceptions for short-term and hedged positions, distributions on the shares of common stock constituting dividend income paid to U.S. holders that are domestic corporations generally will qualify for the dividends-received deduction. You should consult your own tax advisor regarding the availability of the reduced dividend tax rate and the dividends-received deduction in light of your particular circumstances. We do not anticipate paying a dividend to shareholders in the foreseeable future.

Disposition

If you sell or otherwise dispose of any shares of the common stock, you will generally recognize capital gain or loss equal to the difference between your amount realized and your adjusted tax basis in such shares of common stock. Such capital gain or loss will be long-term capital gain or loss if your holding period for such shares of common stock is more than one year. Long-term capital gain of non-corporate U.S. holders, including individuals, that is recognized in taxable years beginning before January 1, 2013 is generally taxed at a maximum rate of 15%, although that may change in future years. The deductibility of capital losses is subject to limitations.

If you allow a warrant to lapse or expire without exercise, the warrant is deemed to be sold or exchanged on the date of expiration. Therefore, you will generally recognize a capital loss in an amount equal to your tax basis in the warrant, if any. The loss is treated as short-term or long-term depending on your holding period in the warrant.

Information Reporting and Backup Withholding

For non-corporate U.S. holders, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to the payment of dividends on common stock and the payment of proceeds from the sale, redemption or other disposition of common stock.

In general, payments made in the United States or through certain United States related financial intermediaries with respect to the ownership and disposition of the shares of common stock will be required to be reported to the IRS unless you are a corporation or other exempt recipient and, when required, demonstrate this fact. In addition, you may be subject to a backup withholding tax (currently at a rate of 28%) on such payments unless you (i) are a corporation or other exempt recipient and when required, demonstrate this fact or (ii) provide a taxpayer identification number and otherwise comply with applicable certification requirements.

You should consult your own tax advisor regarding your qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable. The backup withholding tax is not an additional tax and you may use amounts withheld as a credit against your United States federal income tax liability or may claim a refund so long as you timely provide required information to the IRS.

54

THIS DISCUSSION IS INCLUDED FOR YOUR GENERAL INFORMATION ONLY. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO YOU OF THIS OFFERING IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING ANY STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.

EXPERTS AND CHANGE IN ACCOUNTANTS

The consolidated financial statements as of December 31, 2011 and for the year ended December 31, 2011 incorporated in this prospectus by reference from our Annual Report on Form 10-K for the year ended December 31, 2011, and the effectiveness of internal control over financial reporting as of December 31, 2011, have been audited by Elliott Davis, L.L.C., an independent registered public accounting firm, as stated in their report appearing therein. The consolidated financial statements as of December 31, 2010 and for the year ended December 31, 2010 incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2011 have been audited by Brown, Edwards and Company, L.L.P., an independent registered public accounting firm, as stated in their report appearing therein.

On March 28, 2011, our Audit Committee received notification from Brown Edwards & Company, LLP, indicating that it declined to stand for re-appointment after completion of the audit for our 2010 fiscal year. On May 9, 2011, our Audit Committee appointed and engaged Elliott Davis, LLC, as our independent registered public accounting firm for the year ending December 31, 2011.

LEGAL MATTERS

The validity of the shares of our common stock offered and certain legal matters will be passed upon for New Peoples Bankshares, Inc. by the law firm of LeClairRyan, a Professional Corporation.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly, current reports, proxy statements and other information with the SEC. Our SEC filings are filed electronically and are available to the public from the SEC’s website at www.sec.gov. In addition, any document we file with the SEC can be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We also provide a link to our filings on the SEC website, free of charge, through our Internet website www.npbankshares.com under “Investor Relations.”

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

This prospectus is part of a registration statement on Form S-1 filed by us with the SEC. You may review the registration statement and the exhibits filed with such registration statement for further information regarding us and the shares of our common stock being sold by this prospectus and the related warrants at the Public Reference Room of the SEC at the locations described above.

We are “incorporating by reference” in this prospectus information that we file with the SEC, which means that we are disclosing important information to you by referring you to those documents. The information that we incorporate by reference is considered to be part of this prospectus, unless we update or supersede that information by the information contained in this prospectus or the information we file subsequently with the SEC that is incorporated by reference in this prospectus. You should carefully read and consider all of these documents before making an investment decision. We are incorporating by reference the following documents that we have filed with the SEC:

• Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as filed on March 1, 2012.

• Our definitive proxy statement on Schedule 14A filed with the SEC on September 30, 2011.

We also incorporate by reference into this prospectus any filing we make with the SEC (excluding information furnished under Items 2.02 or 7.01 of Current Reports on Form 8-K) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus.

Any statement contained in a document that is incorporated by reference will be modified or superseded for all purposes to the extent that a statement contained in this prospectus modifies or is contrary to that previous statement. Any statement so modified or superseded will not be deemed part of this prospectus except as so modified or superseded.

55

You may obtain without charge a copy of any of the documents we incorporate by reference by contacting us at: Todd Asbury, Executive Vice President and Chief Financial Officer, New Peoples Bankshares, Inc., 67 Commerce Drive, Honaker, Virginia 24260. You may also telephone your request at (276) 873-6288.

56

[                    ] Shares

COMMON STOCK

PROSPECTUS

The Date of this Prospectus is             , 2012

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

Set forth below is an estimate of the amount of fees and expenses (other than underwriting discounts and commissions) to be incurred in connection with the issuance of the shares by New Peoples Bankshares, Inc. (the “Registrant”):

SEC Filing Fee	$	4,304
Registrant’s Counsel Fees and Expenses		*
Registrant’s Accounting Fees and Expenses		*
Financial Advisor Expenses		*
Subscription Agent Fees and Expenses		*
Printing and EDGAR		*
FINRA Filing Fee		*
Blue Sky Fees		*
Other		*
TOTAL		*

* To be provided in amendment to the registration statement.

Item 14. Indemnification of Directors and Officers

The Virginia Stock Corporation Act ( the “Act”) permits a Virginia corporation to indemnify a director or officer who is a party to a proceeding because he is or was a director or officer if he acted in good faith and believed that his conduct in his official capacity was in the corporation’s best interest or in all other cases was not opposed to the best interests of the corporation ( or in the case of conduct with respect to an employee benefit plan he believed it to be in the interests of the participants and beneficiaries) and in the case of a criminal proceeding, he had no reasonable belief that his conduct was unlawful. Virginia corporations are not allowed to voluntarily indemnify a director or officer in a proceeding by or in the right of a corporation except for reasonable expenses if it is determined that he met the standard for indemnification for indemnity or in any proceeding charging improper personal benefit in which he was liable based on improperly receiving personal benefit. The Act permits a corporation to pay a director or officer’s reasonable expenses incurred in a proceeding if he furnishes a written statement of his good faith belief that he has met the standard of conduct for indemnification and an undertaking to repay any advances if he is not entitled to mandatory indemnification or it is ultimately determined that he has not met the relevant standard of conduct.

The Articles of Incorporation of the Registrant contain provisions indemnifying the directors and officers of the Registrant if he conducted himself in good faith, believed that his conduct in his official corporate capacity was in its best interest and in all other cases not opposed to its best interest (or in the case of an employee benefit plan, that his conduct was for a purpose he personally believed to be in the best interests of the participants of and beneficiaries of the plan) and he had no reasonable cause to believe, in the case of a criminal proceeding, that his conduct was unlawful. The Articles do not permit indemnification for willful misconduct or knowing violation of criminal law or for liability incurred in any proceeding charging improper personal benefit or involving action in his official capacity in which he was judged liable on the basis that personal benefit was improperly received by him. In addition, the Articles of Incorporation eliminate the personal liability of the Registrant’s directors and officers to the Registrant for monetary damages in any proceeding brought by or in the right of the Registrant or by or on behalf of the shareholders of the Registrant except for liability for willful misconduct, knowing violation of the criminal law or of any securities law.

The Registrant maintains a directors’ and officers’ liability insurance policy which provides coverage for the Registrant and for directors and officers of the Registrant against certain damages and expenses relating to claims against them for negligent acts, errors or omissions, or breaches of duty in their capacity as directors or officers of the Registrant.

Item 15. Recent Sales of Unregistered Securities

Not Applicable.

II-1

Item 16. Exhibits and Financial Statement Schedules

(1) The following exhibits are filed as part of this Registration Statement:

No.	Description
1.1	Form of Subscription Agent Agreement.
2	Agreement and Plan of Share Exchange dated August 15, 2001 (incorporated by reference to Exhibit 2 to Form 8-K filed December 17, 2001).
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 3.1 to Form 8-K filed on April 15, 2004).
4.1	Specimen Common Stock Certificate of New Peoples Bankshares, Inc.
4.2	Form of Warrant to Purchase Shares of Common Stock.
4.3	Form of Rights Certificate.
5.1	Opinion of LeClairRyan, A Professional Corporation, as to the validity of the Securities registered hereunder.
10.1	New Peoples Bank, Inc. 2001 Stock Option Plan (incorporated by reference to Exhibit 10.1 to Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001).
10.2	Form of Non-Employee Director Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to Form 8-K filed November 30, 2004).
10.3	Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.3 to Form 8-K filed November 30, 2004).
10.4	Salary Continuation Agreement, dated December 18, 2002, between New Peoples Bank, Inc. and Frank Sexton, Jr. (incorporated by reference to Exhibit 10.6 to Annual Report on Form 10-K for the fiscal year ended December 31, 2004).
10.5	First Amendment, dated June 30, 2003, to Salary Continuation Agreement between New Peoples Bank, Inc. and Frank Sexton, Jr. (incorporated by reference to Exhibit 10.7 to Annual Report on Form 10-K for the fiscal year ended December 31, 2004).
10.6	Letter Agreement, dated as of June 29, 2009, between the Company and Kenneth D. Hart (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2009).
10.7	Written Agreement, effective August 4, 2010, by and among New Peoples Bankshares, Inc., New Peoples Bank, Inc., the Federal Reserve Bank of Richmond and the State Corporation Commission Bureau of Financial Institutions (incorporated by reference to Exhibit 10.1 to Form 8-K filed August 6, 2010).
10.8	Engagement Letters of Scott & Stringfellow, LLC.
16.1	Brown, Edwards & Company, L.L.P.’s letter to Securities & Exchange Commission, dated April 11, 2011 (incorporated by reference to Exhibit 16.1 to Form 10-K filed on March 1, 2012).
21.1	List of Subsidiaries (incorporated by reference to Exhibit 21 to Form 10-K filed on March 1, 2012).
23.1	Consent of Elliot Davis, LLC.
23.2	Consent of Brown, Edwards & Company, L.L.P.
23.3	Consent of LeClairRyan, A Professional Corporation (included in Exhibit 5.1).
23.4	Consent of Scott & Stringfellow, LLC (included in Exhibit 99.8).
24.1	Power of Attorney (included on signature page).
99.1	Form of Instructions as to Use of Subscription Rights Certificate.
99.2	Form of Letter to Shareholders who are Record Holders.
99.3	Form of Letter to Nominee Holders whose Clients are Beneficial Holders.
99.4	Form of Letter to Clients of Nominee Holders.
99.5	Form of Beneficial Owner Election Form.
99.6	Form of Nominee Holder Certification.
99.7	Form of Notice of Important Tax Information.
99.8	Fairness Opinion of Scott & Stringfellow, LLC.

Financial Statement Schedules: No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial statements or related notes.

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

II-2

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b), if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the County of Russell, Commonwealth of Virginia, on the 27^th day of March, 2012.

NEW PEOPLES BANKSHARES, INC.
By:	/s/ JONATHAN H. MULLINS
	Jonathan H. Mullins
	President and Chief Executive Officer
	(Duly Authorized Representative)

POWER OF ATTORNEY

Each person whose signature appears below appoints Jonathan H. Mullins and C. Todd Asbury or either of them, as his or her true and lawful attorney-in-fact and agent, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and any Registration Statement (including any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorney-in fact and agent may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/ JONATHAN H. MULLINS	President,	March 26, 2012
Jonathan H. Mullins	Chief Executive Officer and Director (principal executive officer)
/s/ TIM BALL	Director	March 26, 2012
Tim Ball
/s/ JOE CARTER	Director	March 26, 2012
Joe Carter
/s/ JOHN D. COX	Director	March 26, 2012
John D. Cox
/s/ CHARLES H. GENT	Director	March 26, 2012
Charles H. Gent
/s/ EUGENE HEARL	Director	March 26, 2012
Eugene Hearl
/s/ HAROLD LYNN KEENE	Director	March 26, 2012
Harold Lynn Keene
/s/ FRANK KILGORE	Director	March 26, 2012
Frank Kilgore
/s/ MICHAEL G. MCGLOTHLIN	Chairman, Director	March 26, 2012
Michael G. McGlothlin
/s/ FRED MEADE	Director	March 26, 2012
Fred Meade
/s/ B. SCOTT WHITE	Director	March 26, 2012
B. Scott White
/s/ C. TODD ASBURY	Executive Vice President and	March 26, 2012
C. Todd Asbury	Chief Financial Officer (principal financial and accounting officer)

II-4

EXHIBIT INDEX

No.	Description
1.1	Form of Subscription Agent Agreement.
2	Agreement and Plan of Share Exchange dated August 15, 2001 (incorporated by reference to Exhibit 2 to Form 8-K filed December 17, 2001).
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 3.1 to Form 8-K filed on April 15, 2004).
4.1	Specimen Common Stock Certificate of New Peoples Bankshares, Inc.
4.2	Form of Warrant to Purchase Shares of Common Stock.
4.3	Form of Rights Certificate.
5.1	Opinion of LeClairRyan, A Professional Corporation, as to the validity of the Securities registered hereunder.
10.1	New Peoples Bank, Inc. 2001 Stock Option Plan (incorporated by reference to Exhibit 10.1 to Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001).
10.2	Form of Non-Employee Director Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to Form 8-K filed November 30, 2004).
10.3	Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.3 to Form 8-K filed November 30, 2004).
10.4	Salary Continuation Agreement, dated December 18, 2002, between New Peoples Bank, Inc. and Frank Sexton, Jr. (incorporated by reference to Exhibit 10.6 to Annual Report on Form 10-K for the fiscal year ended December 31, 2004).
10.5	First Amendment, dated June 30, 2003, to Salary Continuation Agreement between New Peoples Bank, Inc. and Frank Sexton, Jr. (incorporated by reference to Exhibit 10.7 to Annual Report on Form 10-K for the fiscal year ended December 31, 2004).
10.6	Letter Agreement, dated as of June 29, 2009, between the Company and Kenneth D. Hart (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2009).
10.7	Written Agreement, effective August 4, 2010, by and among New Peoples Bankshares, Inc., New Peoples Bank, Inc., the Federal Reserve Bank of Richmond and the State Corporation Commission Bureau of Financial Institutions (incorporated by reference to Exhibit 10.1 to Form 8-K filed August 6, 2010).
10.8	Engagement Letters of Scott & Stringfellow, LLC.
16.1	Brown, Edwards & Company, L.L.P.’s letter to Securities & Exchange Commission, dated April 11, 2011 (incorporated by reference to Exhibit 16.1 to Form 10-K filed on March 1, 2012).
21.1	List of Subsidiaries (incorporated by reference to Exhibit 21 to Form 10-K filed on March 1, 2012).
23.1	Consent of Elliot Davis, LLC.
23.2	Consent of Brown, Edwards & Company, L.L.P.
23.3	Consent of LeClairRyan, A Professional Corporation (included in Exhibit 5.1).
23.4	Consent of Scott & Stringfellow, LLC (included in Exhibit 99.8).
24.1	Power of Attorney (included on signature page).
99.1	Form of Instructions as to Use of Subscription Rights Certificate.
99.2	Form of Letter to Shareholders who are Record Holders.
99.3	Form of Letter to Nominee Holders whose Clients are Beneficial Holders.
99.4	Form of Letter to Clients of Nominee Holders.
99.5	Form of Beneficial Owner Election Form.
99.6	Form of Nominee Holder Certification.
99.7	Form of Notice of Important Tax Information.
99.8	Fairness Opinion of Scott & Stringfellow, LLC.

EX-1.1

Exhibit 1.1

SUBSCRIPTION AGENT

AGREEMENT

THIS SUBSCRIPTION AGENT AGREEMENT (“Agreement”) between New Peoples Bankshares, Inc. (the “Company”), and Registrar and Transfer Company, a New Jersey corporation (the “Agent”), is dated as of     , 2012.

1. Appointment.

(a) The Company is conducting an offering of up to 16,666,667 shares (“Shares”) of its common stock ($2.00 par value) (“Common Stock”) in a rights offering to eligible shareholders and to the public in a public offering at a price of $1.50 per share (the “Offering”). The Offering will not be completed unless the Company receives valid subscriptions for $16 million or 6,666,667 shares (the “Minimum Offering Amount”).

(b) The Company is distributing at no charge (the “Rights Offering”) to its shareholders of record at the close of business on                     , 2012 (the “Record Date”), non-transferable subscription rights (the “Rights”) to purchase                      Shares in the Offering. Each shareholder will receive one Right for each share of Common Stock owned. Each Right entitles the shareholder to purchase 1.665 Shares at a purchase price of $1.50 per Share (the “Subscription Price”). With each five Shares purchased in the Rights Offering, each Purchaser also will receive one (1) warrant to purchase another share of Common Stock at the price of $1.75 per share (the “Warrant(s)”).

(b) The Rights Offering will expire on June 15, 2012 at 5:00 p.m. Eastern Time (the “Rights Expiration Date”), unless the Company extended the period of time for which the Rights Offering is open (but not beyond August 15, 2012), in which event the term “Rights Expiration Date” shall mean the latest time and date at which the Rights Offering, as so extended by the Company from time to time, shall expire.

(c) The Company will also offer in the Offering the balance of the 16,666,667 Shares (“Maximum Offering Amount”) for which valid subscriptions have not been accepted in the Rights Offering to the public at the price of $1.50 per Share (the “Public Offering”). With each five Shares purchased in the Public Offering, each Purchaser shall receive one (1) Warrant. The Public Offering will be completed or terminated by the Company on or before September 15, 2012 or such later date (but not later than December 31, 2012) during which the Company elects to keep the Public Offering open (“Offering Expiration Date”).

(d) The Company filed a Registration Statement on Form S-1 (File No.                      relating to the Rights Offering with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, on                     , 2012 (the “Registration Statement”). The terms of the Offering are more fully described in the Prospectus (the “Prospectus”) forming part of the Registration Statement as such Registration Statement may be declared effective by the SEC. All terms used and not defined in this Subscription Agent Agreement have the same meaning as in the Prospectus. Promptly after the Record Date, the Agent, in its capacity as transfer agent, will generate a list of holders of Common Stock as of the Record Date (the “Record Shareholders List”).

(e) The Company appoints the Agent to act as subscription agent (the “Subscription Agent”) for the Offering in accordance with and subject to the following terms and conditions. “Subscribed” shall mean submitted for purchase of Shares from the Company in accordance with the terms of the Offering, and the term “Subscription” shall mean any such submission whether pursuant to the exercise of Rights in connection with the Rights Offering or by subscriptions in the Public Offering.

2. Subscription of Rights.

(a) The Rights are evidenced by subscription rights (the “Certificates”). The Certificates entitle the recipients to subscribe, upon payment of the Subscription Price, for 1.665 shares per each Right evidenced by a Certificate (the “Basic Subscription Right”). No fractional shares will be issued. In the event that the number of Rights submitted by a recipient are exercisable for a number of Shares that is not a whole number, the number of shares of Common Stock issuable to such recipient will be rounded down to the nearest whole Share.

(b) The Rights Offering includes an over-subscription right entitling recipients that fully exercise their Basic Subscription Right, to subscribe and pay the Subscription Price for Shares that are not subscribed for under the Basic Subscription Rights by other eligible shareholders (the “Over-Subscription Right”). Reference is made to the Prospectus for a complete description of the Basic Subscription Right and the Over-Subscription Right and the proration of it.

3. Duties of Subscription Agent. As Subscription Agent, the Agent is authorized and directed to perform the following:

(a) Issue the Certificates in accordance with this Agreement in the names of the holders of the Common Stock of record or other nominees on the Record Date, keep such records as are necessary for the purpose of recording such issuance, and furnish a copy of such records to the Company. The Certificates may be signed on behalf of the Subscription Agent by the manual or facsimile signature of a Vice President or Assistant Vice President of the Subscription Agent, or by the manual signature of any of its other authorized officers.

(b) Promptly after the Agent receives the Record Shareholders List, the Agent shall:

(i) mail or cause to be mailed, by first class mail, or deliver (which delivery may be done electronically through the facilities of the Depository Trust Company (“DTC”) or otherwise) to each holder of Common Stock of record on the Record Date whose address of record is within the United States, (i) a Certificate evidencing the Rights to which such shareholder is entitled under the Rights Offering, (ii) a copy of the Prospectus, and (iii) a return envelope addressed to the Subscription Agent; and

(ii) mail or cause to be mailed, to each holder of Common Stock of record on the Record Date whose address of record is outside the United States, or is an A.P.O. or F.P.O. address, a copy of the Prospectus. The Agent shall refrain from mailing Certificates issuable to any holder of Common Stock of record on the Record Date whose address of record is outside the United States, or is an A.P.O. or F.P.O. address, and hold such Certificates for the account of such shareholder subject to such shareholder making satisfactory arrangements with the Subscription Agent for the exercise of the

2

Rights evidenced by it, and follow the instructions of such shareholder for the exercise of such Rights if such instructions are received at or before 11:00 a.m., Eastern Daylight Savings Time, at least three business days prior to the Rights Expiration Date.

(c) Accept Subscriptions upon the due exercise (including payment of the Subscription Price) on or prior to the Rights Expiration Date of Rights in accordance with the terms of the Certificates and the Prospectus and accept Subscriptions in the Public Offering on or prior to the Offering Expiration Date upon the due execution of a Subscription Agreement (including payment of the Subscription Price).

(d) Subject to the next sentence, accept Subscriptions from shareholders whose Certificates are alleged to have been lost, stolen, or destroyed upon receipt by the Agent of an affidavit of theft, loss, or destruction and a bond of indemnity in form and substance reasonably satisfactory to the Agent, accompanied by payment of the Subscription Price for the total number of Rights Subscribed. Upon receipt of such affidavit and bond of indemnity and compliance with any other applicable requirements, stop orders shall be placed on said Certificates and the Agent shall withhold delivery of the Rights Subscribed for until after the Certificates have expired and it has been determined that the Rights evidenced by the Certificates have not otherwise been purported to have been exercised or otherwise surrendered.

(e) Accept Subscriptions in the Rights Offering, without further authorization or direction from the Company, without procuring supporting legal papers or other proof of authority to sign (including without limitation proof of appointment of a fiduciary or other person acting in a representative capacity), and without signatures of co-fiduciaries, co-representatives, or any other person:

(i) if the Certificate is registered in the name of a fiduciary and is executed by, and the Common Stock is to be issued in the name of, such fiduciary;

(ii) if the Certificate is registered in the name of joint tenants and is executed by one of the joint tenants, provided the Common Stock is to be issued in the names of, and is to be delivered to, such joint tenants;

(iii) if the Certificate is registered in the name of a corporation and is executed by a person in a manner which appears or purports to be done in the capacity of an officer, or agent, provided the Common Stock is to be issued in the name of such corporation; or

(iv) if the Certificate is registered in the name of an individual and is executed by a person purporting to act as such individual’s executor, administrator, or personal representative, provided, the Common Stock is to be registered in the name of the subscriber as executor or administrator of the estate of the deceased registered holder and there is no evidence indicating the subscriber is not the duly authorized representative that he purports to be.

(f) Refer to the Company, for specific instructions as to acceptance or rejection, Subscriptions in the Rights Offering received after the Rights Expiration Date, Subscriptions not authorized to be accepted, and Subscriptions otherwise failing to comply with the requirements of the Prospectus and the terms and conditions of the Certificates.

3

4. Acceptance of Subscriptions. Upon acceptance of a Subscription, the Agent shall from time to time during the Offering:

(a) Hold all monies received in connection with Subscriptions in a dedicated, non-interest bearing account for the benefit of the Company. Promptly, on one or more occasions following receipt of Subscriptions for at least the Minimum Offering Amount, and upon notice from the Company , the Agent shall distribute to the Company the funds in such account as directed by the Company in such notice. The Agent will not be obligated to calculate or pay interest to any holder or any other party claiming through a holder or otherwise. In the event that the Offering is not consummated because the Company has withdrawn, cancelled or terminated the Offering or has failed to obtain subscriptions for the Minimum Offering Amount by the Offering Expiration Date, the Agent shall liquidate the segregated account in which the subscription monies were held as promptly as practicable and distribute the funds to each respective subscribing shareholder who elected to exercise its Rights and to each subscriber in the Public Offering.

(b) Advise the Company weekly (or more frequently upon request) by email to                      in the form of a spreadsheet as to the total number of Shares Subscribed for and the total amount of funds received, with cumulative totals for each and the amount of funds received identified in accordance with (a) above, deposited, available, or transferred in accordance with (a) above, with cumulative totals; and

(c) As promptly as possible after Subscriptions have been received for the Minimum Offering Amount and thereafter, on one or more occasions as requested by the Company from time to time, but in any event on or before 3:30 p.m., Eastern Daylight Savings Time, on the first full business day following the Offering Expiration Date, advise the Company in accordance with (b) above of the number of Shares already issued in the Offering, the number of Shares Subscribed and the number of Shares unsubscribed. In the event the Offering includes a guarantee delivery period, such report shall be preliminary and a final report will be provided within one day following the expiration of any such guarantee delivery period.

5. Issuance of Shares. Once subscriptions have been received for the Minimum Offering Amount:

(a) As directed by the Company on one or more occasions, the Agent shall issue Common Stock for which Subscriptions have been received and accepted and funds therefor distributed to the Company pursuant to Section 4(a).

(b) The Certificates will be physical certificates.

(c) For so long as this Agreement shall be in effect, the Company will reserve for issuance and keep available free from preemptive rights a sufficient number of shares of Common Stock to enable Shares up to the Maximum Offering Amount to be issued in the Offering. Subject to the terms and conditions of this Agreement, the Agent in its capacity as Transfer Agent for the Common Stock, will issue, in physical form, certificates evidencing the appropriate number of Shares as required from time to time in order to effectuate the Subscriptions.

(d) The Company shall take any and all action, including without limitation obtaining the authorization, consent, lack of objection, registration, or approval of any governmental

4

authority, or the taking of any other action under the laws of the United States of America or any political subdivision, to insure that all Shares issuable upon the exercise of the Certificates or pursuant to Subscriptions at the time of delivery of the certificates (subject to payment of the Subscription Price) will be duly and validly issued and fully paid and non-assessable shares of Common Stock, free from all preemptive rights and taxes, liens, charges, and security interests created by or imposed upon the Company with respect to it.

(e) The Company shall from time to time take all action necessary or appropriate to obtain and keep effective all registrations, permits, consents, and approvals of the SEC and any other governmental agency or authority and make such filings under federal and state laws which may be necessary or appropriate in connection with the issuance and delivery of Certificates or the issuance, sale, transfer, and delivery of Shares issued upon exercise of Certificates or pursuant to Subscriptions in the Offering.

6. Procedure for Discrepancies. The Agent shall follow its regular procedures to attempt to reconcile any discrepancies between the number of Shares that any Certificate may indicate are to be issued to a shareholder and the number that the Record Shareholders List indicates may be issued to such shareholder. In any instance where the Agent cannot reconcile such discrepancies by following such procedures, the Agent will consult with the Company for instructions as to the number of Shares, if any, it is authorized to issue. In the absence of such instructions, the Agent is authorized not to issue any Shares to such shareholder.

7. Procedure for Deficient Items. The Agent shall examine the Certificates and Subscription Agreements received by it as Subscription Agent to ascertain whether they appear to have been properly completed and executed. In the event the Agent determines that any Certificate or Subscription Agreement does not appear to have been properly completed or executed, or where the Certificates or Subscription Agreements do not appear to be in proper form for Subscription, or any other irregularity in connection with the Subscription appears to exist, the Agent shall follow, where possible, its regular procedures to attempt to cause such irregularity to be corrected. The Agent is not authorized to waive any irregularity in connection with the Subscription, unless the Agent shall have received from the Company written approval which was delivered, duly dated and signed by an authorized officer of the Company, indicating that any irregularity in such Subscription has been cured or waived and that such Subscription has been accepted by the Company. Otherwise, if any irregularity in a Certificate or Subscription Agreement is neither corrected nor waived, the Agent will return to the subscribing shareholder or investor (at its option by either first class mail under a blanket surety bond or insurance protecting the Agent and the Company from losses or liabilities arising out of the non-receipt or nondelivery of Certificates or by registered mail insured separately for the value of such Certificates) to such shareholder’s address as set forth in the Subscription any Certificates surrendered in connection with it or any defective Subscription Agreements and, in the case of Certificates, any other documents received with such Certificates, and a letter of notice to be furnished by the Company explaining the reasons for the return of the Certificates and other documents or the Subscription Agreement.

8. Date/Time Stamp. Each document received by the Agent relating to its duties under this Subscription Agent Agreement shall be dated and time stamped when received.

9. Tax Reporting. Should any issue arise regarding federal income tax reporting or withholding, the Agent shall take such action as the Company reasonably instructs in writing.

10. Termination. The Company may terminate this Agreement at any time by so notifying the Agent in writing. The Agent may terminate this Agreement upon 60 days’ prior written notice to

5

the Company. Upon any such termination, the Agent shall be relieved and discharged of any further responsibilities with respect to its duties under this Subscription Agent Agreement. Upon payment of all the Agent’s outstanding fees and expenses, the Agent shall forward to the Company or its designee promptly any Certificate and Subscription Agreement or other document relating to the Agent’s duties that the Agent may receive after its appointment has so terminated. Sections 11, 12, 13, 15, 17, and 19 of this Agreement shall survive any termination of this Agreement.

11. Authorizations and Protections. As agent for the Company, the Agent:

(a) shall have no duties or obligations other than those specifically set forth in this Subscription Agent Agreement or as may subsequently be agreed to in writing by the Agent and the Company;

(b) shall have no obligation to issue any Shares unless the Company provided a sufficient number of certificates for such Shares;

(c) shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of any Certificates surrendered to the Agent or Subscription Agreements submitted to the Agent or Shares issued in the Offering, and will not be required to or be responsible for and will make no representations as to, the validity, sufficiency, value or genuineness of the Offering;

(d) shall not be obligated to take any legal action; if, however, the Agent determines to take any legal action, and where the taking of such action might, in the Agent’s reasonable judgment, subject or expose it to any expense or liability, the Agent shall not be required to act unless it shall have been furnished with an indemnity reasonably satisfactory to it;

(e) may rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile transmission, or other document or security delivered to the Agent and believed by it to be genuine and to have been signed by the proper party or parties;

(f) shall not be liable or responsible for any recital or statement contained in the Prospectus or any other documents relating to it;

(g) shall not be liable or responsible for any failure on the part of the Company to comply with any of its covenants and obligations relating to the Offering, including without limitation obligations under applicable securities laws;

(h) may rely on and shall be fully authorized and protected in acting or failing to act upon the written, telephonic, or oral instructions of officers of the Company with respect to any matter relating to the Agent acting as Subscription Agent covered by this Agreement (or supplementing or qualifying any such actions);

(i) may consult with counsel satisfactory to the Agent, including internal counsel, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by the Agent in good faith and in reliance upon the advice of such counsel; and

6

(j) is not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person.

12. Indemnification. The Company agrees to indemnify the Agent for, and hold it harmless from and against, any loss, liability, claim, or expense (“Loss”) arising out of or in connection with the Agent’s performance of its duties under this Agreement or this appointment, including the costs and expenses of defending itself against any Loss or enforcing this Agreement, except to the extent that such Loss shall have been determined by a court of competent jurisdiction to be a result of the Agent’s negligence or intentional misconduct.

13. Limitation of Liability.

(a) In the absence of negligence or intentional misconduct on its part, the Agent shall not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this Agreement. Anything in this agreement to the contrary notwithstanding, in no event shall the Agent be liable for special, indirect, incidental, or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Agent has been advised of the likelihood of such damages and regardless of the form of action. Any liability of the Agent will be limited to the amount of fees paid by the Company under this Subscription Agent Agreement.

(b) In the event any question or dispute arises with respect to the proper interpretation of this Agreement or the Agent’s duties or the rights of the Company or of any holders surrendering Certificates or submitting Subscription Agreements in the Offering, the Agent shall not be required to act and shall not be held liable or responsible for refusing to act until the question or dispute has been judicially settled (and the Agent may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all shareholders and parties interested in the matter which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to the Agent and executed by the Company and each such shareholder and party. In addition, the Agent may require for such purpose, but shall not be obligated to require, the execution of such written settlement by all the shareholders and all other parties that may have an interest in the settlement.

14. Representations, Warranties and Covenants. The Company represents, warrants, and covenants that

(a) it is duly incorporated, validly existing, and in good standing under the laws of its jurisdiction of incorporation,

(b) the making and consummation of the Offering and the execution, delivery, and performance of all transactions contemplated (including without limitation this Agreement) have been duly authorized by all necessary corporate action and will not result in a breach of or constitute a default under the certificate of incorporation or bylaws of the Company or any indenture, agreement, or instrument to which either is a party or is bound,

(c) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid, binding obligation of the Company, enforceable against the Company in accordance with its terms,

7

(d) the Offering will comply in all material respects with all material applicable requirements of law, and (e) to the best of its knowledge, there is no litigation pending as of the date of this Subscription Agent Agreement in connection with the Offering.

15. Notices. All notices, demands, and other communications given pursuant to the terms and provisions of shall be in writing, shall (except as provided for in Section 16) be deemed effective on the date of receipt, and may be sent by facsimile, overnight delivery services, or by certified or registered mail, return receipt requested to:

If to the Company:

New Peoples Bankshares, Inc.

P.O. Box 1810

Honaker, Virginia 24260

Telephone (276) 873-6288

Email:                     

Facsimile:                     

Attn:                     

With a copy to:

LeClairRyan, A Professional Corporation

10 S. Jefferson Street, Suite 1800

Roanoke, Virginia 24011

Telephone: (540) 510-3024

Facsimile: (540) 510-3050

Email: douglas.densmore@leclairryan.com

Attn: Douglas W. Densmore, Esq.

If to the Agent:

Registrar and Transfer Company

10 Commerce Drive

Cranford, New Jersey 07016-3572

Attention:

Telephone:

Telecopy:

16. Instructions. Any instructions given to the Agent orally, as permitted by any provision of this Agreement, shall, upon the request of the Agent, be confirmed in writing by the Company (which for these purposes only may be undertaken by e-mail transmission) as soon as practicable. The Agent shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation received in accordance with this Section.

17. Fees. Whether or not any Certificates are surrendered to the Agent or Subscription Agreements submitted for its services as Subscription Agent, the Company shall pay to the Agent the fees reflected on the fee schedule attached, together with reimbursement for reasonable out-of-pocket expenses. All amounts owed to the Agent are due upon receipt of the invoice.

18. Force Majeure. the Agent shall not be liable for any failure or delay arising out of conditions beyond its reasonable control including, but not limited to, work stoppages, fires, civil disobedience, riots, rebellions, storms, electrical, mechanical, computer or communications facilities failures, acts of God or similar occurrences.

8

19. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey without giving effect to conflict of laws, rules, or principles.

(b) No provision of this Agreement may be amended, modified, or waived, except in writing signed by all of the parties.

(c) Except as expressly set forth elsewhere in this Agreement, all notices, instructions, and communications under this Agreement shall be in writing, shall be effective upon receipt and shall be addressed as provided in Section 15 to such other address as a party shall notify the other parties in writing.

(d) In the event that any claim of inconsistency between this Agreement and the terms of the Offering arise, as they may from time to time be amended, the terms of the Offering shall control, except with respect to the Agent’s duties, liabilities, and rights, including without limitation compensation and indemnification, which shall be controlled by the terms of this Agreement.

(e) If any provision of this Agreement shall be held illegal, invalid, or unenforceable by any court, this Agreement shall be construed and enforced as if such provision had not been contained in this Subscription Agent Agreement and shall be deemed an Agreement among the parties hereto to the full extent permitted by applicable law.

(f) This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective successors and assigns of the parties.

(g) This Agreement may not be assigned by any party without the prior written consent of all parties.

(h) This Agreement may be executed in counterparts, each of which, when taken together, shall constitute one and the same agreement, and each of which may be delivered by the parties by facsimile or other electronic transmission, which shall not impair the validity of such counterparts.

(Signature page follows)

9

Signature

Page to

Subscription Agent

Agreement

IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized officers as of the day and year above written.

NEW PEOPLES BANKSHARES, INC.

By:

Name:

Title:

REGISTRAR AND TRANSFER COMPANY

By:

Name:

Title:

10

EX-4.1

Exhibit 4.1

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM	-	as tenants in common	UNIF GIFT MIN ACT-		Custodian
TEN ENT	-	as tenants by the entireties		(Cust)		(Minor)
JT TEN	-	as joint tenants with right of survivorship and not as tenants in common			under Uniform Gifts to Minors
				Act
					(State)

Additional abbreviations may also be used though not in the above list.

For Value Received,                             hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

Shares of

the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney

to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises.

Dated:

x
x
NOTICE:	THE SIGNATURE(S)TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed
BY:
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

EX-4.2

Exhibit 4.2

1. Number of Shares Available Under this Warrant; Exercise Price: Expiration.

1.1 Number of Shares. The Registered Holder is entitled to purchase the number of shares of NPB’s common stock specified on the face of this warrant under the terms of this warrant. NPB shall reserve for issuance to the Registered Holder the shares that can be acquired or exercised pursuant to this warrant. The warrants are being issued pursuant to the offering the terms and conditions of which are set forth in NPB’s Prospectus dated                     2012 (the “Prospectus”) and are incorporated herein by reference. Copies of the Prospectus may be obtained from Registrar and Transfer Company, the Warrant Agent (“RT”).

1.2 Exercise Price. The exercise price (“Purchase Price”) for each share to be acquired by the Registered Holder by exercise of this warrant is $1.75.

1.3 Expiration. This warrant is exercisable upon issuance and at any time thereafter until 5:00 p.m., local time in Cranford, N.J. on                     (the “Expiration Time”). After the Expiration Time, no unexercised portion of this warrant shall be exercisable.

2. No Fractional Shares. In the event that the exercise of this warrant would result in the issuance of a fractional share of common stock (that is, in the issuance of less than one whole share of common stock), the fraction shall be disregarded and the Registered Holder shall not be entitled to any compensation therefor.

3. Adjustments of Number of Shares Issuable Upon Exercise of Warrant. The exercise price and the number of shares underlying the warrant are subject to appropriate adjustment in the even of stock splits, reverse stock splits, stock dividends on NPB’s common stock, stock combinations or similar events affecting NPB’s common stock. In addition, in the event of any merger, consolidation, sale or other reorganization event in which NPB’s common stock is converted into or exchanged for securities, cash or other property, then following such event, the Registered Holder will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property which the holders would have received had they exercised the warrants immediately prior to the reorganization event.

Except to the extent specified in Section 3, the Registered Holder shall not be entitled to any adjustment as a result of the issuance of common shares for value, including, by way of example only, the sale of authorized but unissued common shares or the issuance of shares pursuant to any equity incentive or compensation plan, the exercises of options or warrants, or any other issuance of any securities of NPB for value.

4. Covenants of NPB. NPB agrees that all shares which may be issued upon the exercise of this warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all preemptive rights of any shareholder and all taxes, liens and charges with respect to the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such Issue).

5. Warrant Registered Holder Not Deemed a Shareholder. The Registered Holder of this warrant, as such, is not entitled to vote or receive dividends or have the rights associated with the owner of common shares for any purpose, as such, any right to vote, give or withhold consent to any corporate action, receive notice of meetings, receive dividends, or subscription rights, or otherwise, prior to the issuance of record to the Registered Holder the shares to the Registered Holder upon the exercise of this warrant.

6. Limitations On Exercise of Warrants. This warrant may be exercised in whole and in part on one or more occasions; provided, that partial exercises shall be for not fewer than the purchase of the lesser of (a) not less than one hundred (100) shares or (b) all shares then available for exercise under the warrant. The Registered Holder may exercise the same by surrendering this warrant, with the form of subscription at the end hereof duly executed by such Registered Holder accompanied by payment in U.S. Dollars by personal check drawn on a U.S. bank, including New Peoples Bank, or a cashier’s check drawn only on New Peoples Bank, Inc. payable as set forth below or by wire transfer as provided below.

7. Non-Transferability of Warrants. The Registered Holder understands that NPB shall not permit the purchase of any shares under this warrant by any person other than the Registered Holder or transferees by operation of the law. This warrant is not transferable except by operation of the law. The Registered Holder further understands that only the Registered Holder may exercise or attempt to exercise this warrant. The warrants are not attached to the shares that were offered in the offering in connection with which the warrants were issued. If these shares are transferred by the Registered Holder, the Registered Holder will retain the related warrants.

8. Notices. All communications hereunder shall be In writing mailed by registered or certified mail, hand delivery or delivered by courier, if to NPB to 67 Commerce Drive, Honaker VA 24260, Attention: President; or if to Registrar and Transfer Company, the Warrant Agent, to 10 Commerce Drive, Cranford N.J. 07016, Attention: Reorg/Exchange Department. All communications hereunder shall be in writing and, If sent to the Registered Holder, shall be mailed by registered or certified mall, hand delivered or delivered by courier, to the address of such Registered Holder as set forth in NPB’s or Registrar and Transfer’s records. The Registered Holder may change his, her or its address by proper notice to NPB and Registrar and Transfer sent in conformity with this Section. Risk of non-transmission or untimely delivery of any notice shall be and remain at all times on the Registered Holder.

DELIVERY OPTIONS FOR SHARES

By Mail, Hand or Overnight Courier:

Registrar & Transfer Company

10 Commerce Drive

Cranford, New Jersey 07016

Attention: Reorg/Exchange Department

Delivery to an address other than the address listed above will not constitute valid delivery.

Delivery by facsimile will not constitute valid delivery.

PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY

IF YOU WISH TO EXERCISE ALL OR A PORTION OF YOUR WARRANTS

I exercise		warrants x 1.00. =
	(no. of warrants)		(total no. of your new shares)

Therefore, I apply for:

	x $1.75 = $
(no. of new shares)		(amount enclosed)

TO EXERCISE: I acknowledge that I received the Prospectus and I hereby irrevocably exercise the number of warrants set forth above for the number of shares indicated above on the terms and conditions specified in the Prospectus. I hereby agree that if I fail to pay for the shares which I have subscribed, the Company may exercise its legal remedies against me.

Signature(s) of Subscriber(s)

                    Indicate, by initialing in the provided blank, that you are aware of the absence of deposit insurance covering the securities being sold pursuant to this Warrant Certificate.

IMPORTANT: THE SIGNATURE(S) MUST CORRESPOND IN EVERY PARTICULAR, WITHOUT ALTERATION, WITH THE NAME(S) AS PRINTED ON THE REVERSE OF THIS WARRANT CERTIFICATE.

If signature is by trustee(s), executor(s), administrator(s), guardians(s), attorney(s)-in-fact, agent(s),officer(s) of a corporation or another acting in a fiduciary or representative capacity, please provide the following information (please print). See the instructions.

Name(s): Taxpayer ID# or Social Security #:

Capacity (Full Title)

FULL PAYMENT FOR THE SHARES MUST ACCOMPANY THIS FORM AND MUST BE MADE IN U.S. DOLLARS BY PERSONAL CHECK DRAWN ON A U.S. BANK, INCLUDING NEW PEOPLES BANK, OR BY A CASHIER’S CHECK DRAWN ONLY ON NEW PEOPLES BANK OR WIRETRANSFER PAYABLE TO REGISTRAR AND TRANSFER COMPANY.

EX-4.3

Exhibit 4.3

DELIVERY OPTIONS FOR RIGHTS CERTIFICATE

By Mail, Hand or Overnight Courier:

Registrar & Transfer Company

10 Commerce Drive

Cranford, New Jersey 07016

Attention: Reorg/Exchange Department

Delivery to an address other than the address listed above will not constitute valid delivery.

Delivery by facsimile will not constitute valid delivery.

PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY.

SECTION 1

IF YOU WISH TO SUBSCRIBE FOR YOUR FULL SUBSCRIPTION PRIVILEGE OR A PORTION THEREOF:

Basic Subscription Right

I exercise		rights	x	1.665	=
	(no. of your rights)			(ratio)		(total no. of your new shares)

Therefore, I apply for:

	x	$	1.50	=	$
(no. of new shares)		(subscription price)				(amount enclosed)

Over-Subscription Privilege

If you fully exercise your Basic Subscription Right and wish to subscribe for additional shares up to the total number of unsubscribed shares, you may exercise your Over-Subscription Privilege. If sufficient shares of Common Stock are available, the Company will seek to honor the over-subscription requests in full

The maximum number of unsubscribed shares:

	-		=		shares
(total offered shares)		(total number of   your new shares)		(maximum unsubscribed shares)

Therefor, I apply for:

	X	$	1.50	=	$
(no. of oversubscription shares applied for)			(subscription price)			(additional amount enclosed)

Total Amount Enclosed: $
	(Sum of Basic Plus Over-Subscription Amounts)

¨ Check drawn on a U.S. bank payable to “Registrar and Transfer Company,” as Subscription Agent.

¨ Wire transfer directly to the segregated account maintained by Registrar and Transfer Company, as Subscription Agent.

TO SUBSCRIBE: I acknowledge that I have received the prospectus for this offering and I hereby irrevocably subscribe for the number of shares indicated above on the terms and conditions specified in the prospectus. I hereby agree that if I fail to pay for the shares of Common Stock for which I have subscribed, the Company may exercise its legal remedies against me.

Signature(s) of Subscriber(s)

                     Indicate, by initialing In the provided blank, that you are aware of the absence of deposit insurance covering the securities being sold pursuant to this Subscription Certificate.

IMPORTANT: THE SIGNATURE(S) MUST CORRESPOND IN EVERY PARTICULAR, WITHOUT ALTERATION, WITH THE NAME(S) AS PRINTED ON THE REVERSE OF THIS SUBSCRIPTION CERTIFICATE.

If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a corporation or another acting in a fiduciary or representative capacity, please provide the following information (please print). See the instructions.

Name(s):

Capacity (Full Title):

Taxpayer ID # or Social Security #:

SECTION 2

SPECIAL ISSUANCE OR DELIVERY INSTRUCTIONS FOR SUBSCRIPTION RIGHTS HOLDERS:

(a) To be completed ONLY if the certificate representing the Common Stock is to be issued in a name other than that of the registered holder. (See the Instructions.) DO NOT FORGET TO COMPLETE THE GUARANTEE OF SIGNATURE(S) SECTION BELOW.

ISSUE COMMON STOCK TO:

(Please Print Name)

(Print Full Address)

(Social Security # or Tax ID #)

(b) To be completed ONLY If the certificate representing the Common Stock is to be sent to an address other than that shown on the front of this certificate. (See the Instructions.) DO NOT FORGET TO COMPLETE THE GUARANTEE OF SIGNATURE(S) SECTION BELOW

(Please Print Name)

(Print Full Address)

(Social Security # or Tax ID #)

GUARANTEE OF SIGNATURE(S)

YOU MUST HAVE YOUR SIGNATURE GUARANTEED IF YOU WISH TO HAVE YOUR SHARES DELIVERED TO AN ADDRESS OTHER THAN YOUR OWN OR TO A SHAREHOLDER OTHER THAN THE REGISTERED HOLDER.

Your signature must be guaranteed by an Eligible Guarantor Institution, as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. These generally include (a) a commercial bank or trust company, (b) a member firm of a domestic stock exchange, or (c) a credit union.

Signature:
	(Name of Bank or Firm)

By:
	(Signature of Officer)

FULL PAYMENT FOR THE SHARES MUST ACCOMPANY THIS FORM AND MUST BE MADE IN UNITED STATES DOLLARS BY PERSONAL CHECK DRAWN UPON A UNITED STATES BANK OR WIRE TRANSFER PAYABLE TO REGISTRAR AND TRANSFER COMPANY.

EX-5.1

Exhibit 5.1

March 28, 2012

New Peoples Bankshares, Inc.

67 Commerce Drive

Honaker, Virginia 24260

Re: Registration Statement on Form S-l

Ladies and Gentlemen:

We have acted as counsel to New Peoples Bankshares, Inc., a Virginia corporation (the “Company”), in connection with a Registration Statement on Form S-l filed by the Company with the Securities and Exchange Commission (the “Registration Statement”) on March 28, 2012, as amended, and the prospectus included in the Registration Statement (“Prospectus”) for the purpose of registering the following: (i) subscription rights (the “Rights”) to be distributed to holders of record of the shares of Common Stock, par value $2.00 per share, of the Company (“Common Stock”) as of the record date for the rights offering, which Rights entitle the holders to subscribe for shares of Common Stock; (ii) the shares of Common Stock offered pursuant to the Registration Statement in the rights offering, and the public offering each as described in the Prospectus (“Offering”), and the shares of Common Stock to be issued to B. Scott White and Harold Lynne Keene, respectively, upon the conversion (the “Conversion”) into shares of Common Stock of indebtedness evidenced by Convertible Notes of the Company in the aggregate principal amount of $5,450,000 plus accrued interest (all such shares of Common Stock, the “Shares”); (iii) the warrants to purchase one (1) of a share of Common Stock (the “Warrants”) for each five (5) Shares acquired pursuant to this Offering or in the Conversion; (iv) the shares of Common Stock issuable upon the exercise of the Warrants (the “Warrant Shares”).

In connection with the rendering of the opinion set forth below, we have examined, are familiar with and to the extent we deemed appropriate we have relied on originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the form of engagement letter attached as an exhibit to the Registration Statement (the “Engagement Letter”), (iii) the Articles of Incorporation and Bylaws of the Company as currently in effect, and proposed amendments to either of them, subject to stockholder approval, (iv) resolutions adopted by the Board of Directors of the Company with respect to the Registration Statement, and (v) such other documents, agreements, records, instruments, certificates of public officials and certificates of officers or other representatives of the Company and others as we have deemed necessary or appropriate for purposes of and as a basis for rendering the opinion set forth below.

E-mail: douglas.densmore@leclairryan.com Direct Phone: 540.510.3024 Direct Fax: 540.510.3050 1800 Wells Fargo Tower, Drawer 1200 Roanoke, Virginia 24006 Phone: 540.510.3000 \ Fax: 540.510.3050

CALIFORNIA \ CONNECTICUT \ MASSACHUSETTS \ MICHIGAN \ NEW JERSEY \ NEW YORK \ PENNSYLVANIA \ VIRGINIA \ WASHINGTON, D.C.

ATTORNEYS AT LAW \ WWW.LECLAIRRYAN.COM

New Peoples Bankshares, Inc.

March 28, 2012

Page 2

In our examination, we have (i) assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals, (ii) assumed the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such copies and (iii) assumed and relied upon the truth, accuracy and completeness (without independent investigation or verification) of the information, representations, warranties and statements contained in the records, documents, instruments and certificates we have reviewed. In rendering the opinion set forth below, we have assumed that all parties other than the Company, had, have or will have all requisite power and authority to execute and deliver all agreements, documents, instruments and certificates examined by us and have also assumed the due authorization by all requisite action, and the due execution and delivery, by such parties of all such agreements, documents, instruments and certificates and the validity and binding effect of them. As to any facts material to the opinion expressed in this letter which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Company and others.

Our opinion is limited to applicable provisions of the Virginia Stock Corporation Act. We express no opinion with respect to the laws of any other jurisdiction. Our opinion is further subject to equitable principles including principles governing the availability of specific performance, injunctive relief or other equitable remedies, which generally place the award of such remedies, subject to certain guidelines, at the discretion of the court to which application for such relief is made.

Based upon and subject to the foregoing, and subject to the exceptions, assumptions, qualifications, and limitations set forth in this letter, we are of the opinion that:

1. The Rights have been duly authorized by the Company by appropriate corporate action, and when issued, as contemplated by the Prospectus, the Rights will be the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement may be limited by (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or other similar laws now or later in effect relating to creditors’ rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).

2. The Shares have been duly authorized by the Company by appropriate corporate action, and when issued and delivered against payment upon due and proper exercise of the Rights, pursuant to an accepted Subscription Agreement in the public offering, or upon the Conversion, all as contemplated by the Prospectus, the Shares will be validly issued, fully paid and non-assessable.

New Peoples Bankshares, Inc.

March 28, 2012

Page 3

3. The Warrants have been duly authorized by the Company by appropriate corporation action, and when issued and delivered as contemplated by the Prospectus, the Warrants will be the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement may be limited by (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or other similar laws now or later in effect relating to creditors’ rights generally and (b) general principals of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).

4. The Warrant Shares have been duly authorized by the Company by appropriate corporation action, and when issued and delivered against payment upon due and proper exercise of the Warrants as contemplated by the Prospectus and the Warrant Agreement with respect to the same, the Warrant Shares will be validly issued, fully paid and non-assessable.

We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Prospectus included. However, in giving this consent, we do not admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated under that Act.

This opinion is furnished by us, as counsel to the Company, in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act and, except as provided in the immediately preceding paragraph, is not to be used, circulated or quoted for any other purpose or otherwise referred to or relied upon by any other person without our express written permission.

Very truly yours,

Douglas W. Densmore

EX-10.8

Exhibit 10.8

	Investment Banking Group
	901 East Byrd Street
	Suite 410
	Richmond, VA 23219
	(804) 782-8894 (Phone)
October 29, 2010	(804) 649-0990 (Fax)

CONFIDENTIAL

Mr Jonathan H. Mullins

Chief Executive Officer

New Peoples Bankshares, Inc.

67 Commerce Drive

P.O Box 1810

Honaker, VA 24260

Dear Mr. Mullins.

Scott & Stringfellow, LLC (“S&S”) is pleased to set forth in this letter (the “Agreement”) the terms of the exclusive engagement by New Peoples Bankshares, Inc. (the “Company”) of S&S related to providing financial advisory and investment banking services in connection with certain strategic assessments and transactions, which may include an offering of the Company’s common stock to investors (the “Offering”), the terms of which are discussed herein. It is intended that the Offering will initially consist of a private placement of such common stock with qualified investors identified by the Company (“Company Investors”) and other qualified investors identified by S&S (“S&S Investors”) with priority in the case of over-subscription given to Company Investors In the event that insufficient subscriptions are obtained from the private placement process, the Company may elect to offer pursuant to this Agreement additional common stock in a public offering, including a rights offering to existing shareholders (a “Public Offering”)

1. S&S’s Responsibilities

In connection with this engagement, S&S will provide the following services related to the Offering

(a) determine the minimum amount of capital to be raised and an appropriate offering price range,

(b) assist the Company and Company counsel in preparing the offering documentation to be distributed to potential investors;

(c) prepare an investor presentation with management of the Company and assist in the coordination of investor meetings both with respect to Company Investors, S&S Investors and any potential investors in a Public Offering;

(d) assist in the communication process with potential investors and existing shareholders;

(e) meet with the board of directors and management to discuss any of these services; and,

Mr. Jonathan H Mullins

October 29, 2010

Page 2 of 7

(f) provide such other financial advisory and investment banking services in connection with the Offering as may be agreed upon by S&S and the Company

The scope of S&S’s engagement shall be limited to those matters expressly set forth in this Agreement. For the sake of clarity, the scope of S&S’s engagement shall not include giving tax, legal, regulatory, accountancy or other specialist or technical advice

2. The Company’s Responsibilities

(a) The Company will provide S&S with access to the directors, officers and key employees and any other corporate information of the Company as S&S may reasonably request, including all information (financial or otherwise), data, opinions, appraisals, valuations, other information and materials relating to the Company that is relevant to the Offering. The Company will ensure that all information concerning the Company provided to S&S by the Company and its directors, officers, employees, agents and advisors in any form will be accurate and complete in all material respects, and will not be misleading in any material respect. S&S may rely on such information without verification S&S shall not be required to physically inspect any assets or to prepare or obtain any independent evaluation or appraisal of any of the assets or liabilities of the Company or to make any determination as to the solvency of any party S&S shall be entitled to assume that any projections prepared by the Company have been reasonably prepared and reflect the best currently available estimates and judgments of the party preparing or providing such projections.

(b) The Company further acknowledges that it will ensure that all information concerning the Company to be provided to S&S, directly or indirectly, orally or in writing, by the Company and its directors, officers, employees, agents and advisors will be accurate and complete in all material respects, and will not be misleading in any material respect. S&S will be entitled to rely on, and will be under no obligation to verify, the accuracy or completeness of such information.

(c) The Company agrees to notify S&S promptly in writing of any material change, actual or contemplated, relating to the Company’s business, operations, affairs, condition (financial or otherwise) or prospects, which would render untrue any statement of material fact made to S&S or material information furnished to S&S, or which would constitute an omission to state a material fact necessary to make any statement of material fact made to S&S or material information furnished to S&S not misleading in light of the circumstances in which it was made or furnished.

(d) The Company acknowledges that in carrying out S&S’s services hereunder, S&S will be relying on information prepared and supplied by the Company, its directors, officers, employees, agents and advisors. Subject to the exercise of S&S’s professional judgment, S&S will be entitled to rely on, and will be under no obligation to verify, the accuracy or completeness of such information. Subject to applicable securities law requirements, S&S will not be under any obligation to investigate any changes which may occur in such information subsequent to the date thereof, unless the Company specifically requests S&S to investigate such changes.

(e) In order to coordinate most effectively our efforts to effect an Offering, the Company will promptly inform S&S of any inquiry it may receive concerning the availability of any material portion of the securities or assets of the Company for purchase outside of the ordinary course of business. During the period of S&S’s engagement, neither the Company nor its representatives will initiate any discussions looking toward the sale of any portion of the securities or assets of Company outside the ordinary course of business without first consulting with S&S

Mr. Jonathan H Mullins

October 29, 2010

Page 3 of 7

3. S&S’s Fees

(a) As compensation for S&S’s financial advisory and general investment banking services hereunder, the Company agrees to pay to S&S (1) a non-refundable financial advisory fee (“Advisory Fee”) equal to $150,000 with (i) $50,000 due and payable upon execution of this Agreement and (ii) $25,000 due and payable on the first business day of each of the first four consecutive months following the execution of this Agreement This Advisory Fee compensates S&S for all prior and future consulting, modeling, and other services associated with our relationship with the Company

(b) S&S has no obligation to take or purchase any shares of common stock in connection with the Offering; however, S&S has agreed to use its commercially reasonable efforts in the placement with investors of shares in the Offering If S&S places shares with investors in the Offering, S&S will receive a placement fee (the “Placement Fee”) of 6.5% of the aggregate dollar amount of common stock sold by S&S to S&S Investors and to investors in any Public Offering pursuant hereto and 1.5% of the aggregate dollar amount of common stock sold to Company Investors As further compensation for S&S’s services to be provided in connection with an Offering, the Company agrees to pay S&S upon completion of the Offering, a success fee (the “Success Fee”) equal to 1 5% of the aggregate dollar amount of common stock raised in an Offering. This fee will be in addition to the Placement Fee set forth above However, the Placement Fee and the Success Fee shall be reduced as necessary to ensure that the overall underwriting compensation as determined pursuant to FINRA Rule 5110 to be received by S&S in connection with a Public Offering pursuant to this Agreement, including without limitation, the portions of the Advisory Fee, the Placement Fee, the Success Fee and the reimbursements contemplated pursuant to Section 3(e) below related to such Public Offering, shall not exceed on an aggregate basis 8.0% of the aggregate offering proceeds of such Public Offering.

(c) The Company will pay all of its fees and expenses in connection with the Offering, including without limitation, filing and registration fees, travel, printing costs for the offering documentation, accounting fees, legal fees, and roadshow expenses In addition, the Company will pay the reasonable out-of-pocket fees and disbursements of counsel to S&S in connection with the qualification of the common stock, or any required notices or filings, under state securities or blue sky laws

(d) In addition, whether or not a Offering is consummated, the Company agrees to reimburse S&S, upon request, for its reasonable, accountable out-of-pocket expenses related to this engagement including S&S’s attorneys’ fees, any road show expenses and any expenses and attorney fees for S&S services in the event S&S (or any of its directors, officers, agents or professional advisors) is required to testify or participate in any legal or other proceedings before any court or regulatory authority, in connection with its services hereunder, which out-of-pocket expenses shall not exceed $50,000 on a aggregate basis (provided, however, that such expense cap in no way limits or impairs the provisions of Section 4 hereof). Subject to Section 4 hereof, the Company shall not be liable for any fees, costs or expenses incurred by S&S in connection with any arbitration or litigation between the Company and S&S regarding this Section 3 unless S&S is the substantially prevailing party therein.

(e) In the event a Public Offering is commenced and is subsequently terminated, S&S shall receive only the compensation permitted by FINRA Rule 5110(F)(2)(D) in connection with such Public Offering

Mr. Jonathan H. Mullins

October 29, 2010

Page 4 of 7

4. Indemnity

The Company and S&S agree to the provisions relating to indemnity and liability set forth in Annex A.

5. Term of Agreement

This Agreement may be terminated by the Company or S&S at any time and without liability or further obligation to the Company or S&S (except for compensation earned and reimbursable expenses incurred to the date of termination) upon prior written notice to the other party. Notwithstanding the foregoing, however, S&S shall be entitled to its full compensation as contemplated pursuant to this Agreement in the event that, at any time prior to the expiration of 24 months after written termination by the Company, an Offering of the type described in this Agreement is consummated solely through a private placement with an advisor or agent other than S&S, Additionally, by execution of this Agreement, the Company hereby commits to provide S&S with a right of first refusal to serve as advisor, agent or underwriter for any future capital raise or financial advisory engagement, including merger, acquisition or reorganization transactions, that the Company undertakes within 24 months of the closing or termination of the Offering. Furthermore, the indemnity provisions of Section 4 of this Agreement and the waiver of the right to trial by jury provision and other provisions of Section 6(c) hereof will remain operative regardless of such termination.

6. Other Matters

(a) S&S and the Company confirm their understanding and agreement that the Company has retained S&S hereunder as an independent contractor, and not as a fiduciary or agent, and solely for the Company’s benefit and not for the benefit of any third party, including the Company’s security holders and creditors. The scope of S&S’s engagement shall be limited to those matters expressly set forth in this Agreement For the sake of clarity, the scope of S&S’s engagement shall not include giving tax, legal, regulatory, accountancy or other specialist or technical advice.

(b) S&S is an affiliate of BB&T Corporation, which through its subsidiaries and affiliates provides full-service securities trading and brokerage services and other investment banking and financial advisory services. In the ordinary course of its trading and brokerage activities, one or more of S&S’s affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or for the account of customers, in the securities or options or other derivatives relating to the securities of the Company S&S recognizes its responsibility for compliance with federal laws in connection with such activities. This Agreement shall not limit or preclude BB&T Corporation, S&S or any of their affiliates (a) from carrying on any business with, from providing banking or other financial services to, or from participating in any capacity (including as an equity investor, in any party whatsoever) including without limitation, any competitor, supplier or customer of the Company, or any other party which may have interests different from or adverse to the Company, or (b) from carrying on its business as currently conducted or as such business may be conducted in the future

(c) This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia, without giving effect to that state’s principles of conflict of law. Any claim or controversy arising out of or relating to the Company’s obligations to pay S&S’s fees or expenses under Section 3 of this Agreement shall be settled exclusively by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association before a panel of three arbitrators The arbitrators shall each have at least ten years of direct experience with the investment banking and securities industries The arbitration of any such claim or controversy shall take place in Richmond,

Mr. Jonathan H. Mullins

October 29, 2010

Page 5 of 7

Virginia Judgment on any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. All other claims or controversies arising out of or relating to this Agreement shall be resolved pursuant to an action brought exclusively in the federal or state courts sitting in Richmond, Virginia The parties irrevocably submit to the jurisdiction of such courts and waive all objections to such venue. S&S and the Company (on behalf of itself and, to the extent permitted by law, on behalf of its security holders) each waives any right to trial by jury in any proceeding with respect to S&S’s engagement. Notwithstanding the second sentence of this paragraph, the parties may at any time apply to a court for injunctive relief

(d) This Agreement may be executed in counterparts, each of which shall be deemed an original, all of which shall constitute one and the same instrument. Either party’s execution and delivery of this Agreement may be evidenced by either physical delivery or facsimile communication of such executed Agreement or executed counterpart to the other party

(e) This Agreement may not be amended, nor any provision hereof waived, except in a writing signed by the Company and S&S. Neither party may assign this Agreement without the prior written consent of the other party. This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior discussions, communications, agreements and understandings, if any, whether oral or written, relating to its subject matter. If any provision of this Agreement shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision of this Agreement, which shall remain in full force and effect

If the foregoing meets with your approval, please sign both copies of this Agreement and return one fully-executed version to S&S

Very truly yours,
Scott & Stringfellow, LLC
By.	G. Jacob Savage, III
Title	Senior Managing Director

Agreed as of the date first written above:
New Peoples Bankshares, Inc
By.
Title.	President & CEO
	Its Authorized Officer

ANNEX A

In connection with S&S’s engagement to advise and to assist the Company pursuant to the letter agreement, dated October 29, 2010, to which this Annex A is attached, the Company agrees that the Company shall indemnify and hold harmless S&S and each of its affiliates, and their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act of 1933 or Section 20(a) of the Securities Exchange Act of 1934), employees, affiliates, agents, counsel and other advisors (hereinafter collectively referred to as an “Indemnified Party”), to the full extent allowed by law or equity, from and against any and all judgments, losses, claims (whether or not valid), damages, costs, fees, expenses or liabilities, joint or several, to which an Indemnified Party may become subject, (i) related to or arising out of any untrue statement or alleged untrue statement of a material fact contained in offering documentation distributed in connection with the Offering, including documents described in or incorporated by reference, or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in older to make the statements therein, in light of the circumstances under which they were made, not misleading, (n) related to or arising out of, in whole or in part, any inaccuracy in the representations or warranties of the Company contained in the [subscription agreements, placement agreement or registration rights agreement] anticipated to be entered into in connection with the Offering contemplated hereby, or any failure of the Company to perform its obligations thereunder; or (iii) related to or arising out of S&S’s engagement or performance under the Agreement, the transactions contemplated thereby, the services rendered by S&S under the Agreement, or any actual or threatened claim, litigation, investigation, proceeding or action in any court or before any regulatory, administrative or other body relating to any of the foregoing (hereinafter referred to collectively as a “Claim”), and shall, upon request, reimburse an Indemnified Party for all reasonable legal and other costs, fees and expenses as they are incurred in connection with investigating, preparing or defending a Claim, whether or not such Indemnified Party is ever made party to any Legal proceedings or such Claim arose before or after the date hereof; provided, however, that no such indemnification shall be required to be paid to an Indemnified Party with respect to a Claim (x) to the extent the Claim arises out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with the written instructions of S&S or (y) that is finally determined by a court of competent jurisdiction (after exhaustion of all appeals) to have resulted primarily and proximately from the gross negligence, bad faith or willful misconduct of such Indemnified Party.

If the foregoing indemnity is unavailable or insufficient for any reason to hold any Indemnified Party harmless, then the Company shall contribute to any amounts paid or payable by an Indemnified Party in such proportion as appropriately reflects the relative benefits received by such Indemnified Party and the Company in connection with the matters to which the Claim relates If an allocation solely on the basis of benefits is judicially determined to be impermissible, then the Company shall contribute in such proportion as appropriately reflects the relative benefits and relative fault of the Company and such Indemnified Party, as well as any other equitable considerations. In no event shall the Company contribute less than the amount necessary to ensure that the aggregate liability of S&S and any other Indemnified Party for contribution pursuant to this paragraph in connection with all Claims does not exceed the amount of fees actually received by S&S under the Agreement For purposes hereof, relative benefits to the Company and S&S in connection with the Agreement shall be deemed to be in the same respective proportions as the total gross proceeds from the Offering (before deducting expenses) received by the Company and the aggregate fees actually received by S&S under the Agreement bear to the aggregate offering price of the common stock sold in the Offering, and relative fault of each Indemnified Party and the Company shall be determined by reference to, among other things, whether any untrue or alleged untrue statements of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by S&S, whether the actions and omissions to act were by such Indemnified Party or the Company and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such action or omission.

All amounts due to an Indemnified Party hereunder shall be payable by the Company promptly upon request by such Indemnified Party. In addition, the Company shall pay all costs and expenses (including reasonable attorneys’ fees) incurred by an Indemnified Party to enforce the terms of this Annex A.

The Company agrees not to waive, release or settle any Claim (whether or not S&S or any other Indemnified Party is a formal party to such Claim) in respect of which indemnification may be sought hereunder without the prior written consent of S&S (which consent will not be unreasonably withheld), unless such waiver, release or settlement includes an unconditional release of S&S and each Indemnified Party from all liability arising out of such claim.

The provisions of this Annex A shall be in addition to any liability which the Company may otherwise have to S&S; shall not be limited by any rights that S&S or any other Indemnified Party may otherwise have; shall remain in full force and effect regardless of any expiration or termination of S&S’s engagement; and shall be binding upon any successors or assigns of S&S and the Company.

In addition, neither S&S nor any of its affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934), employees or agents shall have any liability to the Company or its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the services to be rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by S&S and that are finally determined (by a court of competent jurisdiction and after exhausting all appeals) to have resulted primarily from the gross negligence, bad faith or willful misconduct of S&S.

Investment Banking Group

901 East Byrd Street

Suite 410

Richmond, VA 23219

(804) 782-8894 (Phone)

(804) 649-0990 (Fax)

February 22, 2012

CONFIDENTIAL

Mr. Jonathan H. Mullins

Chief Executive Officer

New Peoples Bankshares, Inc.

67 Commerce Drive

P.O. Box 1810

Honaker, VA 24260

Dear Mr. Mullins:

Scott & Stringfellow, LLC (“S&S”) is pleased to set forth in this letter (the “Agreement”) the terms of the exclusive engagement by New Peoples Bankshares, Inc. and its subsidiary New Peoples Bank Inc. (the “Company”), of S&S to deliver a fairness opinion to the Board of Directors of the Company in connection with the potential offering of the Company’s common stock through a rights offering and public offering (collectively referred to as the “Offering”) as outlined in a separate engagement letter dated October 29, 2010.

1. S&S’s Responsibilities

In connection with this engagement, S&S will provide the following services:

(a) prepare and deliver to the Company’s Board of Directors an opinion (the “Fairness Opinion”) as to the fairness from a financial point of view to the shareholders of the Company the pricing of the contemplated Offering; and

(b) provide an update on general bank and thrift capital markets conditions at the present time.

The scope of S&S’s engagement shall be limited to those matters expressly set forth in this Agreement. For the sake of clarity, the scope of S&S’s engagement shall not include giving tax, legal, regulatory, accountancy or other specialist or technical advice.

2. The Company’s Responsibilities

(a) The Company will provide S&S with access to the directors, officers and key employees and any other corporate information of the Company as S&S may reasonably request, including all information (financial or otherwise), data, opinions, appraisals, valuations, other information and materials relating to the Company that is relevant to the Offering. The Company will ensure that all information concerning the Company provided to S&S by the Company and its directors, officers, employees, agents and advisors in any form will be accurate and complete in all material respects, and will not be misleading in any material respect. S&S may rely on such information without verification. S&S shall not be required to physically inspect any assets or to prepare or obtain any independent evaluation or appraisal of any of the assets or liabilities of the Company or to make any determination as to the solvency

Mr. Jonathan H. Mullins

February 22, 2012

Page 2 of 7

of any party. S&S shall be entitled to assume that any projections prepared by the Company have been reasonably prepared and reflect the best currently available estimates and judgments of the party preparing or providing such projections.

(b) The Company further acknowledges that it will ensure that all information concerning the Company to be provided to S&S, directly or indirectly, orally or in writing, by the Company and its directors, officers, employees, agents and advisors will be accurate and complete in all material respects, and will not be misleading in any material respect S&S will be entitled to rely on, and will be under no obligation to verify, the accuracy or completeness of such information.

(c) The Company agrees to notify S&S promptly in writing of any material change, actual or contemplated, relating to the Company’s business, operations, affairs, condition (financial or otherwise) or prospects, which would render untrue any statement of material fact made to S&S or material information furnished to S&S, or which would constitute an omission to state a material fact necessary to make any statement of material fact made to S&S or material information furnished to S&S not misleading in light of the circumstances in which it was made or furnished.

(d) The Company acknowledges that in carrying out S&S’s services hereunder, S&S will be relying on information prepared and supplied by the Company, its directors, officers, employees, agents and advisors Subject to the exercise of S&S’s professional judgment, S&S will be entitled to rely on, and will be under no obligation to verify, the accuracy or completeness of such information Subject to applicable securities law requirements, S&S will not be under any obligation to investigate any changes which may occur in such information subsequent to the date thereof, unless the Company specifically requests S&S to investigate such changes.

(e) In order to coordinate most effectively our efforts to effect an Offering, the Company will promptly inform S&S of any inquiry it may receive concerning the availability of any material portion of the securities or assets of the Company for purchase outside of the ordinary course of business. During the period of S&S’s engagement, neither the Company nor its representatives will initiate any discussions looking toward the sale of any portion of the securities or assets of Company outside the ordinary course of business without first consulting with S&S.

3. S&S’s Fees

(a) As compensation for S&S’s services described in this Agreement, the Company agrees to pay to S&S a non-refundable “Fairness Opinion Fee” equal to $100,000. S&S requests that the Fairness Opinion Fee be paid in full immediately following the delivery of the Fairness Opinion to the Board of Directors, however, if the Company chooses, the Fairness Opinion Fee may be payable in the following installments- (1) $50,000 due and payable upon the signing of this Agreement, and (2) $50,000 due in full no later than 5 PM Eastern Standard Time on May 31, 2012. The Fairness Opinion Fee is payable to S&S in full by the aforementioned dates regardless of the status of the Offering at that time

(b) In addition, whether or not an Offering is consummated, the Company agrees to reimburse S&S, upon request, for its reasonable, accountable out-of-pocket expenses related to this engagement including S&S’s attorneys’ fees and any expenses and attorney fees for S&S services in the event S&S (or any of its directors, officers, agents or professional advisors) is required to testify or participate in any legal or other proceedings before any court or regulatory authority, in connection with its services hereunder, which out-of-pocket expenses shall not exceed $10,000 on a aggregate basis (provided, however, that such expense cap in no way limits or impairs the provisions of Section 4 hereof). Subject to Section 4 hereof, the Company shall not be liable for any fees, costs or expenses incurred by S&S in connection with any arbitration or litigation between the Company and S&S regarding this Section 3 unless S&S is the substantially prevailing party therein.

Mr. Jonathan H. Mullins

February 22, 2012

Page 3 of 7

4. Indemnity

The Company and S&S agree to the provisions relating to indemnity and liability set forth in Annex A

5. Term of Agreement

This Agreement may be terminated by the Company or S&S at any time and without liability or further obligation to the Company or S&S (except for compensation earned and reimbursable expenses incurred to the date of termination) upon prior written notice to the other party Furthermore, the indemnity provisions of Section 4 of this Agreement and the waiver of the right to trial by jury provision and other provisions of Section 6(c) hereof will remain operative regardless of such termination.

6. Other Matters

(a) S&S and the Company confirm their understanding and agreement that the Company has retained S&S hereunder as an independent contractor, and not as a fiduciary or agent, and solely for the Company’s benefit and not for the benefit of any third party, including the Company’s security holders and creditors The scope of S&S’s engagement shall be limited to those matters expressly set forth in this Agreement. For the sake of clarity, the scope of S&S’s engagement shall not include giving tax, legal, regulatory, accountancy or other specialist or technical advice.

(b) S&S is an affiliate of BB&T Corporation, which through its subsidiaries and affiliates provides full-service securities trading and brokerage services and other investment banking and financial advisory services. In the ordinary course of its trading and brokerage activities, one or more of S&S’s affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or for the account of customers, in the securities or options or other derivatives relating to the securities of the Company. S&S recognizes its responsibility for compliance with federal laws in connection with such activities. This Agreement shall not limit or preclude BB&T Corporation, S&S or any of their affiliates (a) from carrying on any business with, from providing banking or other financial services to, or from participating in any capacity (including as an equity investor, in any party whatsoever) including without limitation, any competitor, supplier or customer of the Company, or any other party which may have interests different from or adverse to the Company, or (b) from carrying on its business as currently conducted or as such business may be conducted in the future

(c) This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia, without giving effect to that state’s principles of conflict of law. Any claim or controversy arising out of or relating to the Company’s obligations to pay S&S’s fees or expenses under Section 3 of this Agreement shall be settled exclusively by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association before a panel of three arbitrators The arbitrators shall each have at least ten years of direct experience with the investment banking and securities industries The arbitration of any such claim or controversy shall take place in Richmond, Virginia. Judgment on any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. All other claims or controversies arising out of or relating to this Agreement shall be resolved pursuant to an action brought exclusively in the federal or state courts sitting in Richmond, Virginia The parties irrevocably submit to the jurisdiction of such courts and waive all objections to such venue. S&S and the Company (on behalf of itself and, to the extent permitted by law, on behalf of its security holders) each waives any right to trial by jury in any proceeding with respect to S&S’s engagement Notwithstanding the second sentence of this paragraph, the parties may at any time apply to a court for injunctive relief.

Mr. Jonathan H. Mullins

February 22, 2012

Page 4 of 7

(d) This Agreement may be executed in counterparts, each of which shall be deemed an original; all of which shall constitute one and the same instrument Either party’s execution and delivery of this Agreement may be evidenced by either physical delivery or facsimile communication of such executed Agreement or executed counterpart to the other party

(e) This Agreement may not be amended, nor any provision hereof waived, except in a writing signed by the Company and S&S. Neither party may assign this Agreement without the prior written consent of the other party This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior discussions, communications, agreements and understandings, if any, whether oral or written, relating to its subject matter. If any provision of this Agreement shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision of this Agreement, which shall remain in full force and effect.

If the foregoing meets with your approval, please sign both copies of this Agreement and return one fully-executed version to S&S.

Very truly yours,
Scott & Stringfellow, LLC
By:	David M Wojdyla
Title:	Vice President

Agreed as of the date first written above.
New Peoples Bankshares, Inc.
By:

Title:	President & CEO
	Its Authorized Officer

ANNEX A

In connection with S&S’s engagement to advise and to assist the Company pursuant to the letter agreement, dated February 22, 2012, to which this Annex A is attached, the Company agrees that the Company shall indemnify and hold harmless S&S and each of its affiliates, and their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act of 1933 or Section 20(a) of the Securities Exchange Act of 1934), employees, affiliates, agents, counsel and other advisors (hereinafter collectively referred to as an “Indemnified Party”), to the full extent allowed by law or equity, from and against any and all judgments, losses, claims (whether or not valid), damages, costs, fees, expenses or liabilities, joint or several, to which an Indemnified Party may become subject, (i) related to or arising out of any untrue statement or alleged untrue statement of a material fact contained in offering documentation distributed in connection with the Offering, including documents described in or incorporated by reference, or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii) related to or arising out of, in whole or in part, any inaccuracy in the representations or warranties of the Company contained in the [subscription agreements, placement agreement or registration rights agreement] anticipated to be entered into in connection with the Offering contemplated hereby, or any failure of the Company to perform its obligations thereunder, or (iii) related to or arising out of S&S’s engagement or performance under the Agreement, the transactions contemplated thereby, the services rendered by S&S under the Agreement, or any actual or threatened claim, litigation, investigation, proceeding or action in any court or before any regulatory, administrative or other body relating to any of the foregoing (hereinafter referred to collectively as a “Claim”), and shall, upon request, reimburse an Indemnified Party for all reasonable legal and other costs, fees and expenses as they are incurred in connection with investigating, preparing or defending a Claim, whether or not such Indemnified Party is ever made party to any legal proceedings or such Claim arose before or after the date hereof; provided, however, that no such indemnification shall be required to be paid to an Indemnified Party with respect to a Claim (x) to the extent the Claim arises out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with the written instructions of S&S or (y) that is finally determined by a court of competent jurisdiction (after exhaustion of all appeals) to have resulted primarily and proximately from the gross negligence, bad faith or willful misconduct of such Indemnified Party.

If the foregoing indemnity is unavailable or insufficient for any reason to hold any Indemnified Party harmless, then the Company shall contribute to any amounts paid or payable by an Indemnified Party in such proportion as appropriately reflects the relative benefits received by such Indemnified Party and the Company in connection with the matters to which the Claim relates. If an allocation solely on the basis of benefits is judicially determined to be impermissible, then the Company shall contribute in such proportion as appropriately reflects the relative benefits and relative fault of the Company and such Indemnified Party, as well as any other equitable considerations. In no event shall the Company contribute less than the amount necessary to ensure that the aggregate liability of S&S and any other Indemnified Party for contribution pursuant to this paragraph in connection with all Claims does not exceed the amount of fees actually received by S&S under the Agreement For purposes hereof, relative benefits to the Company and S&S in connection with the Agreement shall be deemed to be in the same respective proportions as the total gross proceeds from the Offering (before deducting expenses) received by the Company and the aggregate fees actually received by S&S under the Agreement bear to the aggregate offering price of the common stock sold in the Offering, and relative fault of each Indemnified Party and the Company shall be determined by reference to, among other things, whether any untrue or alleged untrue statements of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by S&S, whether the actions and omissions to act were by such Indemnified Party or the Company and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such action or omission.

All amounts due to an Indemnified Party hereunder shall be payable by the Company promptly upon request by such Indemnified Party. In addition, the Company shall pay all costs and expenses (including reasonable attorneys’ fees) incurred by an Indemnified Party to enforce the terms of this Annex A.

The Company agrees not to waive, release or settle any Claim (whether or not S&S or any other Indemnified Party is a formal party to such Claim) in respect of which indemnification may be sought hereunder without the prior written consent of S&S (which consent will not be unreasonably withheld), unless such waiver, release or settlement includes an unconditional release of S&S and each Indemnified Party from all liability arising out of such claim.

The provisions of this Annex A shall be in addition to any liability which the Company may otherwise have to S&S; shall not be limited by any rights that S&S or any other Indemnified Party may otherwise have; shall remain in full force and effect regardless of any expiration or termination of S&S’s engagement; and shall be binding upon any successors or assigns of S&S and the Company.

In addition, neither S&S nor any of its affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934), employees or agents shall have any liability to the Company or its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the services to be rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by S&S and that are finally determined (by a court of competent jurisdiction and after exhausting all appeals) to have resulted primarily from the gross negligence, bad faith or willful misconduct of S&S

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

New Peoples Bankshares, Inc.

Honaker, Virginia

We consent to the incorporation by reference in this Registration Statement on Form S-1 of New Peoples Bankshares, Inc. of our reports dated February 29, 2012, relating to our audits of the consolidated financial statements and internal control over financial reporting, appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our firm under the captions “Experts and Change in Accountants” in such Prospectus.

/s/ Elliott Davis, LLC

Galax, Virginia

March 29, 2012

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form S-1 to be filed on or about March 26, 2012, of New Peoples Bankshares, Inc. of our report dated March 11, 2011, except for Notes 3, 7, 8, 11, 21, 23, 24 and 26, as to which the date is June 23, 2011, appearing in the Annual Report on Form 10-K/A, (Amendment No.1) of New Peoples Bankshares, Inc. filed on June 24, 2011, for the year ended December 31, 2010 and our report on internal control over financial reporting as to which the date is March 11, 2011 (except for the matters discussed in paragraphs six and seven, as to which the date is June 23, 2011).

CERTIFIED PUBLIC ACCOUNTANTS

100 Arbor Drive, Suite 108

Christiansburg, Virginia 24073

March 29, 2012

Your Success is Our Focus

100 Arbor Drive, Suite 108 — Christiansburg, VA 24073 — 540-381-381-9333 — Fax: 540-381-8319 — www.BEcpas

EX-99.1

Exhibit 99.1

[NPB letterhead]

SUBSCRIPTION RIGHTS TO PURCHASE SHARES OF COMMON STOCK AND WARRANTS

OFFERED PURSUANT TO SUBSCRIPTION RIGHTS

DISTRIBUTED TO SHAREHOLDERS

OF NEW PEOPLES BANKSHARES, INC.

March     , 2012

To Our Clients:

Enclosed for your consideration are a prospectus, dated                     , 2012 (the “Prospectus”), relating to the offering (the “Offering”) of up to 16,666,667 shares (the “Shares”) of the common stock ($2.00 par value per share) (the “Common Stock”), by New Peoples Bankshares, Inc. (the “Company”). In connection with the Offering a “Beneficial Owner Election Form” is enclosed relating to the distribution by the Company (the “Rights Offering”) of nontransferable subscription rights (the “Rights”) to all holders of record of shares of the Common Stock, at 5:00 p.m., Eastern Time, on                     , 2012 (the “Record Date”). The Offering, the Rights and Shares are described in the Prospectus.

In the Rights Offering, the Company is offering an aggregate of 16,666,667 Shares, as described in the Prospectus. In addition, the purchaser also will receive a warrant to purchase one (1) share of common stock for each five (5) Shares purchased in the Rights Offering.

The Rights will expire, if not exercised prior to 5:00 p.m., Eastern Time, on                     , 2012 unless extended (as it may be extended, the “Rights Expiration Date”).

As described in the accompanying Prospectus, each beneficial owner of shares of Common Stock registered in your name or the name of your nominee is entitled to one Right for every share of Common Stock owned by such beneficial owner at 5:00 p.m., Eastern time, on the Record Date. Each Right will allow the holder to subscribe for 1.665 Shares (the “Basic Subscription Right”) at the cash price of $1.50 per Share (the “Subscription Price”). For example, if you owned 100 shares of Common Stock as of 5:00 p.m., Eastern time, on the Record Date, you would receive 100 Rights and would have the right to purchase 166 Shares. If you purchased all 166 Shares in this Rights Offering, you also would receive warrants for 33 additional shares in the future, all for $1.75 per share.

In the event that you purchase all of the Shares available to you pursuant to your Basic Subscription Right, you may also exercise an over-subscription privilege (the “Over-Subscription Privilege”) to purchase Shares that are not purchased by our shareholders through the exercise of their Basic Subscription Rights (the “Unsubscribed Shares”), subject to certain other limitations, availability and the allocation process more fully described in the Prospectus. If over-subscription requests exceed the number of Shares available, we will allocate the available Shares among the shareholders exercising the Over-Subscription Privilege by multiplying the number of Shares requested by each subscriber through the exercise of their Over-Subscription Privilege by a fraction that equals (x) the number of Shares available to be purchased through Over-Subscription Privileges divided by (y) the total number of Shares requested by all subscribers through the exercise of their Over-Subscription Privileges.

You will be required to submit payment in full for all the Shares you wish to buy with both your Basic Subscription Rights and Over-Subscription Privilege. Because we will not know the total number of Unsubscribed Shares prior to the Rights Expiration Date, if you wish to maximize the number of Shares you purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the aggregate Subscription Price for the maximum number of Shares available to you, assuming that no shareholders other than you have purchased any shares of Common Stock pursuant to the Basic Subscription Right. The Company will eliminate fractional shares of Common Stock resulting from the exercise of the Over-Subscription Privilege by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

The Company can provide no assurances that you will actually be entitled to purchase the number of Shares issuable upon the exercise of your Over-Subscription Privilege in full at the expiration of the Rights Offering. The Company will not be able to satisfy your exercise of the Over-Subscription Privilege if all of our shareholders exercise their Basic Subscription Rights in full, and we will only honor an Over-Subscription Privilege to the extent sufficient Shares arc available following the exercise of subscription rights under the Basic Subscription Rights and subject to certain other limitations.

• To the extent the aggregate Subscription Price of the maximum number of Unsubscribed Shares available to you pursuant to the Over-Subscription Privilege is less than the amount you actually paid in connection with the exercise of the Over- Subscription Privilege, you will be allocated only the number of Unsubscribed Shares available to you as soon as practicable after the Rights Expiration Date, and your excess subscription payment received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

• To the extent the amount you actually paid in connection with the exercise of the Over-Subscription Privilege is less than the aggregate Subscription Price of the maximum number of Unsubscribed Shares available to you pursuant to the Over- Subscription Privilege, you will be allocated the number of Unsubscribed Shares for which you actually paid in connection with the Over-Subscription Privilege. See “The Rights Offering — The Subscription Rights — Over-Subscription Privilege.”

THE MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF COMMON STOCK CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. EXERCISES AND SALES OF RIGHTS MAY BE MADE ONLY BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS.

Accordingly, we request instructions as to whether you wish us to elect to subscribe for any Shares to which you are entitled pursuant to the terms and subject to the conditions set forth in the enclosed Prospectus. However, we urge you to read the document carefully before instructing us to exercise your Rights.

If you wish to have us, on your behalf, exercise the Rights for any Shares to which you are entitled, please so instruct us by completing, executing and returning to us the Beneficial Owner Election Form and payment for any Shares you wish to subscribe for.

Your Beneficial Owner Election Form and payment should be forwarded to us as promptly as possible, and well in advance of the Rights Expiration Date, in order to permit us to exercise Rights on your behalf in accordance with the provisions of the Rights Offering. Payments should be made in U.S. Dollars and: (1) by personal check drawn on a U.S. Bank; (2) a bank check drawn on New Peoples Bank, Inc., and in either case payable to Registrar and Transfer Company – New Peoples Escrow; or by wire; For the Benefit of Registrar and Transfer Company as Rights Offering Agent for Various Holders, Account No. 276-053-5977. TD Bank, 6000 Atrium Way, Mount Laurel, NJ 08054, ABA No. 031-201-360. The Rights Offering will expire at 5:00 p.m., Eastern time, at the Rights Expiration Date. Once you have exercised the Basic Subscription Right or the Over-Subscription Privilege, such exercise may not be revoked.

The Offering consists of the Rights Offering and the public offering. The Rights Offering will end on June 15, 2012 unless extended by us (but to not later than August 15, 2012) and in the event that the Company does not receive total subscriptions in the Offering (including subscriptions exercising Basic Subscription Rights and Over-Subscription Privileges and subscriptions received in the public offering) by September 15, 2012 (or such later date to which the Offering may be extended, but not beyond December 31, 2012), the Offering will not close, each subscriber will receive a refund of the subscriber’s subscription payment without interest and no Shares will be issued. In the event sufficient total subscriptions are received in the Rights Offering and public offering by September 15, 2012 (or by such later date to which we extend the Offering) for at least the Minimum Offering Amount, the Shares subscribed for in the Offering, including pursuant to the exercise of the Rights, will be issued in one or more closings as directed by the Company after the Minimum Offering Amount is reached.

Additional copies of the enclosed materials may be obtained by contacting the Registrar and Transfer Company 800-368-5948 or via e-mail at info@rtco.com. Any questions or requests for assistance concerning the Rights Offering should be directed to Registrar and Transfer Company.

Very truly yours,

Recordholder

NEW PEOPLES BANKSHARES, INC.

BENEFICIAL OWNER ELECTION FORM

The undersigned acknowledge(s) receipt of your letter and the enclosed materials relating to the grant of non-transferable rights to purchase Shares (consisting of one share of common stock, par value $2.00 per share, and a warrant to purchase one (1) share of common stock for each five (5) Shares purchased in this offering), of New Peoples Bankshares, Inc. (the “Company”).

I (we) hereby instruct you as follows:

(CHECK THE APPLICABLE BOXES AND PROVIDE ALL REQUIRED INFORMATION)

Box 1. ¨ Please DO NOT EXERCISE RIGHTS for Shares.

Box 2. ¨ Please EXERCISE RIGHTS for Shares as set forth below:

A. Number of Shares Being Purchased:                     

B. Total Exercise Price Payment Required:                     

Payments should be made in U.S. Dollars and: (1) by personal check drawn on a U.S. Bank; (2) a bank check drawn on New Peoples Bank, Inc.; or (3) by wire transfer. Checks should be made payable to Registrar and Transfer Company – New Peoples Escrow. Wire instructions are attached.

Basic Subscription Right

I exercise                                                                       rights		X	1.665	(no. of Shares)
(no. of your rights)			(ratio)
Therefore, I apply for		X	$    .00 =	$
	(no. of Shares)		(subscription price)	(amount enclosed or wired)

Over-Subscription Privilege

If you fully exercise your Basic Subscription Right, and wish to subscribe for additional Shares up to the total number of unsubscribed Shares, you may exercise your Over-Subscription Privilege. The Over-Subscription Privilege is subject to the rights of other eligible shareholders. If sufficient Shares are available, the Company will seek to honor the over-subscription requests in full. If, however, over-subscription requests exceed the number of unsubscribed Shares, the Company will allocate the unsubscribed Shares among subscribers exercising their Over-Subscription Privilege by multiplying the number of Shares requested by each subscriber through the exercise of their Over-Subscription Privilege by a fraction that equals (x) the number of Shares available to be purchased through Over-Subscription Privileges divided by (y) the total number of Shares requested by all subscribers through the exercise of their Over-Subscription Privileges.

Accordingly, my maximum Over-Subscription Privilege is:

16,666,667		Shares
(total offered Shares)	(total no. of Shares subscribed for above)	(maximum unsubscribed Shares)

Therefore, I apply for:

	X            $1.50
(no. of your over-subscription Shares subscribed for)	(subscription price)	(additional amount enclosed or wired)
Total Payment Required =	$

Box 3. ¨  Payment in the following amount is enclosed or wired.

$                    

(The total of the above Box 3 must equal the Total Payment Required.)

I (we) on my (our) own behalf, or on behalf of any person(s) on whose behalf, or under whose directions, I am (we are) signing this form:

• irrevocably elect to purchase the number of Shares indicated above upon the terms and conditions specified in the prospectus; and

• agree that if I (we) fail to pay for the Shares I (we) have elected to purchase, the exercise will be invalid.

Name of beneficial owner(s):

Signature of Beneficial Owner(s):

If you arc signing in your capacity as a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or another acting in a fiduciary or representative capacity, please provide the following information:

Name:

Capacity:

Address (including Zip Code):

Telephone Number:

Wiring Instructions:

For Benefit of: Registrar and Transfer Company

	As Subscription Agent for Various Holders
Account Number:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA Number:	031-201-360

EX-99.2

Exhibit 99.2

[NPB letterhead]

SUBSCRIPTION RIGHTS TO PURCHASE SHARES OF COMMON STOCK,

INCLUDING WARRANTS

OFFERED PURSUANT TO SUBSCRIPTION RIGHTS

DISTRIBUTED TO SHAREHOLDERS

OF NEW PEOPLES BANKSHARES, INC.

March     , 2012

To Shareholders:

This letter is being distributed by New Peoples Bankshares, Inc. (the “Company”) to all holders of record (the “Recordholders”) of shares of Company common stock, par value $2.00 per share (the “Common Stock”), at 5:00 p.m., Eastern time, on                     , 2012 (the “Record Date”), in connection with the rights offering (the “Rights Offering”) of non-transferable subscription rights (the “Rights”) to subscribe for the purchase of Shares. The Rights Offering is part of an offering by the Company (the “Offering”) of up to 16,666,667 shares of the Common Stock (the “Shares”) as described in the offering prospectus dated                     , 2012 (the “Prospectus”).

In the Rights Offering, the Company is offering an aggregate of                      Shares, as described in the Prospectus. A warrant to purchase one (1) share of Common Stock for every five (5) shares purchased in the offering is included in this Rights Offering.

The Rights will expire, if not exercised prior to 5:00 p.m., Eastern time, on                     , 2012, unless extended (as it may be extended, the “Rights Expiration Date”).

As described in the accompanying Prospectus, you will receive one Right for each share of Common Stock owned at 5:00 p.m., Eastern time, on the Record Date. For every Right, based on the shares you owned as of the record date for the Rights Offering, your basic subscription right gives you the opportunity to purchase 1.665 Shares of common stock (the “Basic Subscription Right”) at the cash price of $1.50 per share (the “Subscription Price”). For every five (5) Shares you purchase, you also will receive a warrant to purchase in the future another share of common stock at an exercise price of $1.75. For example, if you owned 100 shares of Common Stock as of 5:00 p.m., Eastern time, on the Record Date, you would receive 100 Rights and would have the right to purchase 166 Shares. If you purchased all 166 Shares in this Rights Offering, you also would receive warrants for 33 additional shares in the future, all for the Subscription Price.

If you purchase all of the Shares available to you pursuant to your Basic Subscription Right, you may also exercise an over-subscription privilege (the “Over-Subscription Privilege”) to purchase a portion of any Shares that are not purchased by our shareholders through the exercise of their Basic Subscription Right (the “Unsubscribed Shares”), subject to certain other limitations, availability and the allocation process described in the prospectus. If over-subscription requests exceed the number of Shares available, we will allocate the available Shares among the shareholders exercising the Over-Subscription Privilege by multiplying the number of Shares requested by each subscriber through the exercise of his or her Over-Subscription Privilege by a fraction that equals (x) the number of Shares available to be purchased through Over Subscription Privileges divided by (y) the total number of Shares requested by all subscribers through the exercise of their Over-Subscription Privilege.

You will be required to submit payment in full for all the Shares you wish to buy with your Basic Subscription Rights and Over-Subscription Privilege. Because we will not know the total number of Unsubscribed Shares prior to the expiration of the Rights Offering, if you wish to maximize the number of Shares you purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the aggregate Subscription Price for the maximum number of Shares available to you, assuming that no shareholders other than you have purchased any Shares pursuant to their Basic Subscription Right. Fractional shares of Common Stock resulting from the exercise of the Over-Subscription Privilege will be eliminated by rounding down to the nearest whole Share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

The Company can provide no assurances that you actually will be entitled to purchase the number of Shares issuable upon the exercise of your Over-Subscription Privilege in full at the expiration of the Rights Offering. The Company will not be able to satisfy your exercise of the Over-Subscription Privilege if all of the shareholders

exercise their Basic Subscription Rights in full, and we will only honor an Over-Subscription Privilege to the extent sufficient shares are available following the exercise of subscription rights under the Basic Subscription Rights and subject to certain other limitations.

• To the extent the aggregate Subscription Price of the maximum number of Unsubscribed Shares available to you pursuant to the Over-Subscription Privilege is less than the amount you actually paid in connection with exercise of the Over-Subscription Privilege, you will be allocated only the number of Unsubscribed Shares available to you as soon as practicable after the Rights Expiration Date, and your excess subscription payment received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

• To the extent the amount you actually paid in connection with the exercise of the Over-Subscription Privilege is less than the aggregate Subscription Price of the maximum number of Unsubscribed Shares available to you pursuant to the Over-Subscription Privilege, you will be allocated the number of Unsubscribed Shares for which you actually paid in connection with the Over-Subscription Privilege.

The Rights will be evidenced by a non-transferable Rights certificate (the “Rights Certificate”) and will expire at the Rights Expiration Date.

Enclosed are copies of the following documents:

1. Prospectus;

2. Rights Certificate;

3. Instructions as to the use of New Peoples Bankshares, Inc. Rights Certificates;

4. Notice of Tax Information; and

5. A return envelope addressed to Registrar and Transfer Company, the subscription agent.

In the event that the Company does not receive total subscriptions in the Offering (including subscriptions exercising Basic Subscription Rights and Over-Subscription Privileges and subscriptions received in the public offering) by June 15, 2012 (or such later date to which the Offering may be extended, but not beyond September 15, 2012), the Offering will not close and each subscriber will receive a refund of the subscriber’s subscription payment without interest and no Shares will be issued in the Offering. In the event sufficient total subscriptions are received in the Rights Offering and public offering by September 15, 2012 (or by such later date to which we extend the Offering) for at least the Minimum Offering Amount, Shares subscribed for in the Offering, including pursuant to the exercise of Rights, will be issued in one or more closings as directed by the Company after the Minimum Offering Amount is reached.

Your prompt action is requested. To exercise the Rights, you should deliver the properly completed and signed Rights Certificate, with payment of the Subscription Price in full for each share subscribed for pursuant to the Basic Subscription Right and the Over-Subscription Privilege, to the subscription agent, as indicated in the Prospectus. The subscription agent must receive the Rights Certificate with payment of the Subscription Price, including final clearance of any checks, prior to the Rights Expiration Date. A Recordholder cannot revoke the exercise of its Rights. Rights not exercised prior to the Rights Expiration Date will expire. Payments should be made in U.S. Dollars and: (1) by personal check drawn on a U.S. Bank; (2) a bank check drawn on New Peoples Bank, Inc., and in either case payable to Registrar and Transfer Company – New Peoples Escrow; or by wire; For the Benefit of Registrar and Transfer Company as Rights Offering Agent for Various Holders, Account No. 276-053-5977, TD Bank, 6000 Atrium Way, Mount Laurel, NJ 08054, ABA No. 031-201-360.

Additional copies of the enclosed materials may be obtained by contacting Registrar and Transfer Company at (800) 368-5948 or via e-mail at info@rtco.com. Any questions or requests for assistance concerning the rights offering should be directed to Registrar and Transfer Company.

Very truly yours.

New Peoples Bankshares, Inc.

NOTHING IN THE PROSPECTUS OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF NEW PEOPLES BANKSHARES, INC., THE SUBSCRIPTION AGENT OR ANY OTHER PERSON MAKING OR DEEMED TO BE MAKING OFFERS OF THE SECURITIES ISSUABLE UPON VALID EXERCISE OF THE RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALP OF ANY OF THEM WITH RESPECT TO THE OFFERING EXCEPT FOR STATEMENTS MADE IN THE PROSPECTUS.

EX-99.3

Exhibit 99.3

[NPB letterhead]

SUBSCRIPTION RIGHTS TO PURCHASE SHARES CONSISTING OF

SHARES OF COMMON STOCK AND WARRANTS

OFFERED PURSUANT TO SUBSCRIPTION RIGHTS

DISTRIBUTED TO SHAREHOLDERS

OF NEW PEOPLES BANKSHARES, INC.

March     , 2012

To Security Dealers, Commercial Banks,

Trust Companies and Other Nominees:

This letter is being distributed to securities dealers, commercial banks, trust companies and other nominees in connection with the rights offering (the “Rights Offering”) by New Peoples Bankshares, Inc. (the “Company”) of Shares (as such term is defined below), pursuant to non-transferable subscription rights (the “Rights”) distributed to all holders of record (the “Recordholders”) of shares of Company common stock, par value $2.00 per share (the “Common Stock”), at 5:00 p.m., Eastern time, on                     , 2012 (the “Record Date”). The Rights Offering is part of an offering (the “Offering”) by the Company of up to 16,666,667 shares of the Common Stock (the “Shares”) as described in the offering prospectus dated                     , 2012 (the “Prospectus”).

In the Rights Offering, the Company is offering an aggregate of                     Shares to Recordholders, as described in the Prospectus. A warrant to purchase one (1) share of Common Stock for every five (5) Shares purchased in the Offering is included in this Rights Offering.

The Rights will expire, if not exercised prior to 5:00 p.m., Eastern time, on                     , 2012, unless extended (as it may be extended, the “Rights Expiration Date”).

As described in the accompanying Prospectus, each beneficial owner of shares registered in your name or the name of your nominee is entitled to one Right for each share of Common Stock owned by such beneficial owner at 5:00 p.m., Eastern time, on the Record Date. Each Right will allow the holder to subscribe for 1.665 Shares (the “Basic Subscription Right”) at the cash price of $1.50 per Share (the “Subscription Price”). For every five (5) Shares you purchase, you also will receive a warrant to purchase in the future another share of common stock at an exercise price of $1.75. For example, if you owned 100 Shares of Common Stock as of 5:00 p.m., Eastern time, on the Record Date, you would receive Rights to purchase 166 Shares. If you purchased all 166 Shares in this Rights Offering, you also would receive warrants for 33 additional shares in the future, all for the Subscription Price.

If a holder purchases all of the Shares available to it pursuant to its Basic Subscription Right, it may also exercise an over-subscription privilege (the “Over-Subscription Privilege”) to purchase a portion of any Shares that are not purchased by our shareholders through the exercise of their Basic Subscription Right (the “Unsubscribed Shares”), subject to certain other limitations, availability and the allocation process described in the Prospectus. If over-subscription requests exceed the number of Shares available, we will allocate the available Shares among the shareholders exercising the Over-Subscription Privilege by multiplying the number of Shares requested by each subscriber through the exercise of their Over-Subscription Privilege by a fraction that equals (x) the number of Shares available to be purchased through Over-Subscription Privileges divided by (y) the total number of Shares requested by all subscribers through the exercise of their Over-Subscription Privileges.

Each Recordholder will be required to submit payment in full for all the Shares it wishes to buy with its Basic Subscription Rights and Over-Subscription Privilege. Because we will not know the total number of Unsubscribed Shares prior to the expiration of the Rights Offering, if a Recordholder wishes to maximize the number of Shares it purchases pursuant to the Recordholder’s Over-Subscription Privilege, the Recordholder will need to deliver payment in an amount equal to the aggregate Subscription Price for the maximum number of Shares available to the Recordholder, assuming that no shareholders other than such Recordholder purchase any Shares pursuant to their Basic Subscription Right. Fractional shares of Common Stock resulting from the exercise of the Over-Subscription Privilege will be eliminated by rounding down to the nearest whole Share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

The Company can provide no assurances that each Recordholder actually will be entitled to purchase the number of Shares issuable upon the exercise of its Over-Subscription Privilege in full at the expiration of the Rights Offering. The Company will not be able to satisfy a Recordholder’s exercise of the Over-Subscription Privilege if all of the shareholders exercise their Basic Subscription Rights in full, and we will only honor an Over-Subscription Privilege to the extent sufficient Shares are available following the exercise of subscription rights under the Basic Subscription Rights.

• To the extent the aggregate Subscription Price of the maximum number of Unsubscribed Shares available to a Recordholder pursuant to the Over-Subscription Privilege is less than the amount the Recordholder actually paid in connection with the exercise of the Over-Subscription Privilege, the Recordholder will be allocated only the number of Unsubscribed Shares available to it as soon as practicable after the Rights Expiration Date, and the Recordholder’s excess subscription payment received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

• To the extent the amount the Recordholder actually paid in connection with the exercise of the Over-Subscription Privilege is less than the aggregate Subscription Price of the maximum number of Unsubscribed Shares available to the Recordholder pursuant to the Over-Subscription Privilege, such Recordholder will be allocated the number of Unsubscribed Shares for which it actually paid in connection with the Over-Subscription Privilege.

The Rights Offering will end on June 15, 2012 unless extended by us (but not later than August 15, 2012) and in the event that the Company does not receive total subscriptions in the Offering (including subscriptions exercising Basic Subscription Rights and Over-Subscription Privileges and subscriptions received in the public offering) by September 15, 2012 (or such later date to which the Offering may be extended, but not beyond December 31, 2012), the Offering will not close and each subscriber will receive a refund of the subscriber’s subscription payment without interest and no Shares will be issued in the Offering. In the event sufficient total subscriptions are received in the Rights Offering and public offering by September 15, 2012 (or by such later date to which we extend the Offering) for at least the Minimum Offering Amount, the Shares subscribed for in the Offering, including pursuant to the exercise of the Rights, will be issued in one or more closings as directed by the Company after the Minimum Offering Amount has been reached. We are asking persons who hold shares of Common Stock beneficially and who have received the Rights distributable with respect to those shares of Common Stock through a broker, dealer, commercial bank, trust company or other nominee, as well as persons who hold certificates of Common Stock directly and prefer to have such institutions effect transactions relating to the Rights on their behalf, to contact the appropriate institution or nominee and request it to effect the transactions for them.

All commissions, fees and other expenses (including brokerage commissions and transfer taxes), other than fees and expenses of the subscription agent, incurred in connection with the exercise of the Rights will be for the account of the holder of the Rights, and none of such commissions, fees or expenses will be paid by the Company or the subscription agent.

Enclosed are copies of the following documents:

1. Prospectus;

2. A form of letter that may be sent to your clients for whose accounts you hold shares of Common Stock registered in your name or the name of your nominee, with an attached form of instructions;

3. Beneficial Owner Election Form;

4. Nominee Holder Certification;

5. Notice of Tax Information; and

6. A return envelope addressed to Registrar and Transfer Company, the subscription agent.

Your prompt action is requested. To exercise the Rights, you should deliver the properly completed Beneficial Owner Election Forms, with payment of the Subscription Price in full for each Share subscribed for pursuant to the Basic Subscription Right and the Over-Subscription Privilege, to the subscription agent, as indicated in the Prospectus. The subscription agent must receive the Beneficial Owner Election Forms with payment of the

Subscription Price, including final clearance of any personal checks, prior to the Rights Expiration Date. A Recordholder cannot revoke the exercise of its Rights. Rights not exercised prior to the Rights Expiration Date will expire. Payments should be made in U.S. Dollars and: (1) by personal check drawn on a U.S. Bank; (2) a bank check drawn on New Peoples Bank, Inc., and in either case payable to Registrar and Transfer Company – New Peoples Escrow; or by wire; For the Benefit of Registrar and Transfer Company as Rights Offering Agent for Various Holders, Account No. 276-053-5977. TD Bank, 6000 Atrium Way, Mount Laurel, NJ 08054, ABA No. 031-201-360.

Additional copies of the enclosed materials may be obtained by contacting Registrar and Transfer Company at 800-368-5948 or via e-mail at info@rtco.com. Any questions or requests for assistance concerning the rights offering should be directed to Registrar and Transfer Company.

Very truly yours,

New Peoples Bankshares, Inc.

NOTHING IN THIS PROSPECTUS OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF NEW PEOPLES BANKSHARES., INC., THE SUBSCRIPTION AGENT OR ANY OTHER PERSON MAKING OR DEEMED TO BE MAKING OFFERS OF THE SECURITIES ISSUABLE UPON VALID EXERCISE OF THE RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFERING EXCEPT FOR STATEMENTS MADE IN THE PROSPECTUS.

EX-99.4

Exhibit 99.4

For Company Use (Do Not Fill In)

Date Received:
Check No.:
Paid with Subscription:	$
Refund (if any):	$
Balance Due	$
Number of Shares Requested:
Number of Shares Accepted:

SUBSCRIPTION OFFER

New Peoples Bankshares, Inc.

Honaker, Virginia

The undersigned (“you” or “your”), having received and reviewed the prospectus dated [                    ], 2012 (the “Prospectus”) of New Peoples Bankshares, Inc. (the “Company”), a bank holding company organized under the laws of State of Virginia, and in sole reliance on the information contained therein, hereby subscribes for                      shares of the Company’s common stock at a price of $1.50 per share payable as provided herein and as described in and offered (the “Offering”) pursuant to the Prospectus furnished to the undersigned herewith.

The Company is offering a minimum of 6,666,667 (“Minimum Offering Amount”) and a maximum of 16,666,667 (“Maximum Offering Amount”) shares of the Company’s common stock.

The subscription is payable as follows:

The sum of $              (being $1.50 per share of common stock subscribed) is paid herewith, in United States dollars either by personal check drawn on an U.S. bank, a bank check drawn on New Peoples Bank, Inc. or by wire transfer as set out below payable to “Registrar and Transfer – New Peoples Escrow Account” to subscribe for the number of shares set forth above.

With subscriptions and payment being mailed to:

Registrar and Transfer Company

Attn: [                    ]

10 Commerce Drive

Cranford, NJ 07016

Subscription Agent for New Peoples Bankshares, Inc.

The total subscription price must be paid by check or wire transfer at the time you execute this Subscription Offer.

In connection with this subscription, you acknowledge and agree that:

1. Acceptance of Subscription. You understand and agree that the Company shall have the right to accept or reject your subscription in whole or in part, for any reason whatsoever. The Company may reduce the number of shares for which you have subscribed, indicating the lesser number of shares applicable to your subscription on its written form of acceptance. You agree that your subscription will be binding for the lesser number of shares as indicated.

2. Acknowledgments. All terms of the Prospectus are incorporated herein by reference. You hereby acknowledge receipt of a copy of the Prospectus, and represent that this subscription is made solely on the basis of the information contained in the Prospectus and is not made in reliance on any inducement, representation or statement not contained in the Prospectus. You understand that no person (including any officer or director of the Company) has authority to give any information or make any representation not contained in the Prospectus, and if given or made, such information and representations should not be relied upon as having been made by the Company or its officers or directors. This Subscription Offer and the Prospectus contain the entire agreement and understanding among you, the officers and directors of the Company and the Company with respect to the offering and sale of shares in the Offering. This Subscription Offer creates a legally binding obligation, and you agree to be bound by the terms of this Offer.

3. Revocation. You agree that once this Subscription Offer is tendered to the Company you may not withdraw it and that this Subscription Offer shall survive your death or disability.

4. Minimum Offering Amount. In the event that subscriptions in the Offering are received for fewer than the Minimum Offering Amount, your payment for the shares will be refunded to you without interest and no shares will be issued in the Offering.

5. Governing Law. This Subscription Offer is governed by Virginia law (other than its principles of conflict of laws).

6. Escrow. All funds paid under this subscription offer will be held in the Escrow Account as provided in the Prospectus with Registrar and Transfer Company as escrow agent.

7. No Waiver. By executing this Subscription Offer, you are not waiving any rights you may have under federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934.

8. SUBSTITUTE FORM W-9: Under penalties of perjury, you certify that (1) the Social Security Number or Taxpayer Identification Number given below is correct; and (2) you are not subject to backup withholding. (INSTRUCTION: YOU MUST CROSS OUT ITEM (2) DIRECTLY ABOVE IF YOU HAVE BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDER-REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.)

9. By your initials below, you acknowledge and agree that:

(1) THESE SECURITIES ARE NOT DEPOSITS AND ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY OR PERSON AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL; (2) THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, THE FDIC OR THE VIRGINIA BUREAU OF FINANCIAL INSTITUTIONS, NOR HAS THE SEC, THE FDIC OR THE VIRGINIA BUREAU OF FINANCIAL INSTITUTIONS PASSED ON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS, AND THAT ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL; AND (3) YOU HAVE RECEIVED A COPY OF THE PROSPECTUS BEFORE SIGNING THIS SUBSCRIPTION OFFER.

(2) If this subscription offer is being processed through a registered broker-dealer that by execution hereof such broker-dealer is authorized to transfer sufficient funds as indicated above from your account with such broker-dealer to                      as escrow agent.

Instruction: Each subscriber must place initials on the line below to indicate that he/she has read the above paragraphs.

	(Subscriber’s Initials)
(Subscriber’s Initials)

You have signed this Subscription Offer on the date indicated beside your signature below, and hereby request that certificates evidencing the securities purchased pursuant to this Subscription Offer be registered in the name and form of ownership described below.

	(SEAL)
(Signature)		(Date)
	(SEAL)
(Additional Signature, if required)		(Date)

Complete all blanks on this Subscription Offer form, make check or wire transfer as set out below in the amount of $1.50 for each share of common stock of Company subscribed payable to “Registrar and Transfer – New Peoples Escrow Account” and mail subscription and any check to:

Registrar and Transfer Company

Attn: [                    ]

10 Commerce Drive

Cranford, NJ 07016

Subscription Agent for New Peoples Bankshares, Inc.

WIRE INSTRUCTIONS

For the Benefit of:	Registrar and Transfer Company
	As Rights Offering Agent for Various Holders
Account Number:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA Number:	031-201-360

Any questions concerning subscriptions or the offering may be directed to the above address or to (            )                     .

REGISTRATION INFORMATION

(PLEASE PRINT)

Name(s) in which the securities are to be registered
Address (Street or Post Office Box)
City, State, and Zip Code
(    )	(    )
Daytime Phone	Evening Phone	Taxpayer ID (Social Security Number)

Legal form of ownership:

(    ) Individual	(    ) Joint Tenants with Right of Survivorship
(    ) Tenants in Common	(    ) Uniform Transfers to Minors
(    ) Other

EX-99.5

Exhibit 99.5

NEW PEOPLES BANKSHARES, INC.

BENEFICIAL OWNER ELECTION FORM

The undersigned acknowledge(s) receipt of your letter and the enclosed materials relating to the grant of non-transferable rights to purchase Shares (consisting of one share of common stock, par value $2.00 per share, and a warrant to purchase one (1) share of common stock for each five (5) Shares purchased in this offering), of New Peoples Bankshares, Inc. (the “Company”).

I (we) hereby instruct you as follows:

(CHECK THE APPLICABLE BOXES AND PROVIDE ALL REQUIRED INFORMATION)

Box 1. ¨ Please DO NOT EXERCISE RIGHTS for Shares.

Box 2. ¨ Please EXERCISE RIGHTS for Shares as set forth below:

A. Number of Shares Being Purchased:

B. Total Exercise Price Payment Required:

Payments should be made in U.S. Dollars and: (1) by personal check drawn on a U.S. Bank; (2) a bank check drawn on New Peoples Bank, Inc.; or (3) by wire transfer. Checks should be made payable to Registrar and Transfer Company – New Peoples Escrow. Wire instructions are attached.

Basic Subscription Right

I exercise                                                  rights	X	1.665	(no. of Shares)
(no. of your rights)		(ratio)
Therefore, I apply for	X	$        .00 =	$
(no. of Shares)		(subscription price)	(amount enclosed or wired)

Over-Subscription Privilege

If you fully exercise your Basic Subscription Right, and wish to subscribe for additional Shares up to the total number of unsubscribed Shares, you may exercise your Over-Subscription Privilege. The Over-Subscription Privilege is subject to the rights of other eligible shareholders. If sufficient Shares are available, the Company will seek to honor the over-subscription requests in full. If, however, over-subscription requests exceed the number of unsubscribed Shares, the Company will allocate the unsubscribed Shares among subscribers exercising their Over-Subscription Privilege by multiplying the number of Shares requested by each subscriber through the exercise of their Over-Subscription Privilege by a fraction that equals (x) the number of Shares available to be purchased through Over-Subscription Privileges divided by (y) the total number of Shares requested by all subscribers through the exercise of their Over-Subscription Privileges.

Accordingly, my maximum Over-Subscription Privilege is:

16,666,667		Shares
(total offered Shares)	(total no. of Shares subscribed for above)	(maximum unsubscribed Shares)

Therefore, I apply for:

	X                $1.50
(no. of your over-subscription Shares subscribed for)	(subscription price)	(additional amount enclosed or wired)
Total Payment Required =	$

Box 3. ¨ Payment in the following amount is enclosed or wired.

$                     

(The total of the above Box 3 must equal the Total Payment Required.)

I (we) on my (our) own behalf, or on behalf of any person(s) on whose behalf, or under whose directions, I am (we are) signing this form:

• irrevocably elect to purchase the number of Shares indicated above upon the terms and conditions specified in the prospectus; and

• agree that if I (we) fail to pay for the Shares I (we) have elected to purchase, the exercise will be invalid.

Name of beneficial owner(s):

Signature of Beneficial Owner(s):

If you arc signing in your capacity as a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or another acting in a fiduciary or representative capacity, please provide the following information:

Name:

Capacity:

Address (including Zip Code):

Telephone Number:

Wiring Instructions:
For Benefit of:	Registrar and Transfer Company
	As Subscription Agent for Various Holders
Account Number:	276-053-5977
Bank:	TD Bank
	6000 Atrium Way
	Mt. Laurel, NJ 08054
ABA Number:	031-201-360

EX-99.6

Exhibit 99.6

NEW PEOPLES BANKSHARES, INC.

NOMINEE HOLDER CERTIFICATION

The undersigned, a broker, custodian bank, trustee, depositary or other nominee holder of rights (the “Rights”) to purchase shares of New Peoples Bankshares, Inc. (the “Company”) pursuant to the rights offering described and provided for in the Company’s registration statement, as amended, and final prospectus dated                     , 2012 (the “Prospectus”), hereby certifies to the Company and Registrar and Transfer Company, as subscription agent for the Rights Offering, that (1) the undersigned has exercised, on behalf of the beneficial owners thereof (which may include the undersigned), the number of Rights specified below pursuant to the Basic Subscription Right (as defined in the Prospectus), and on behalf of beneficial owners of Rights who have subscribed for the purchase of additional Shares pursuant to the Over-Subscription Privilege (as defined in the Prospectus), listing separately below each such exercised Basic Subscription Right and the corresponding Over-Subscription Privilege (without identifying any such beneficial owner), and (2) each such beneficial owner’s Basic Subscription Right has been exercised in full:

Number of Shares of Common Stock Owned on the Record Dale	Rights Exercised Pursuant to Basic Subscription Rights	Number of Shares Subscribed For Pursuant to Over- Subscription Privilege
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Provide the following information if applicable:

Depository Trust Company (“DTC”) Participant Number            

Participant Name:

By:

Name:

Title:

DTC Basic Subscription Confirmation Number(s)

EX-99.7

Exhibit 99.7

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

General Instructions

Section references are to the Internal Revenue Code unless otherwise noted.

Purpose of Form

A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA.

Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to:

1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),

2. Certify that you are not subject to backup withholding, or

3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income.

Note. If a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar to this Form W-9.

Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:

• An individual who is a U.S. citizen or U.S. resident alien,

• A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States,

• An estate (other than a foreign estate), or

• A domestic trust (as defined in Regulations section 301.7701-7).

Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax on any foreign partners’ share of income from such business. Further, in certain cases where a Form W-9

has not been received, a partnership is required to presume that a partner is a foreign person, and pay the withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid withholding on your share of partnership income.

The person who gives Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States is in the following cases:

• The U.S. owner of a disregarded entity and not the entity,

• The U.S. grantor or other owner of a grantor trust and not the trust, and

• The U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.

Foreign person. If you are a foreign person, do not use Form W-9. Instead, use the appropriate Form W-8 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).

Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income, However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.

If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items:

1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.

2. The treaty article addressing the income.

3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.

Cat. No. 10231X

Form W-9

(Rev. January 2011)

Department of the Treasury

Internal Revenue Service

Form W-9 (Rev. 1-2011) Page 2

4. The type and amount of income that qualifies for the exemption from tax.

5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.

Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States, Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.

If you are a nonresident alien or a foreign entity not subject to backup withholding, give the requester the appropriate completed Form W-8.

What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS a percentage of such payments. This is called “backup withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.

You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.

Payments you receive will be subject to backup withholding if:

1. You do not furnish your TIN to the requester,

2. You do not certify your TIN when required (see the Part II instructions on page 3 for details),

3. The IRS tells the requester that you furnished an incorrect TIN,

4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or

5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for

reportable interest and dividend accounts opened after 1983 only).

Certain payees and payments are exempt from backup withholding. See the instructions below and the separate Instructions for the Requester of Form W-9.

Also see Special rules regarding partnerships on page 1.

Updating Your Information

You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account, for example, if the grantor of a grantor trust dies.

Penalties

Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.

Specific Instructions

Name

If you are an individual, you must generally enter the name shown on your income tax return. However, if you have changed your last name, for instance, due to marriage without informing the Social Security Administration of the name change, enter your first name, the last name shown on your social security card, and your new last name.

If the account is in joint names, list first, and then circle, the name of the person or entity whose number you entered in Part I of the form.

Sole proprietor. Enter your individual name as shown on your income tax return on the “Name” line. You may enter your business, trade, or “doing business as (DBA)” name on the “Business name/disregarded entity name” line.

Partnership, C Corporation, or S Corporation. Enter the entity’s name on the “Name” line and any business, trade, or “doing business as (DBA) name” on the “Business name/disregarded entity name” line.

Disregarded entity. Enter the owner’s name on the “Name” line. The name of the entity entered on the “Name” line should

Form W-9 (Rev. 1-2011) Page 3

never be a disregarded entity. The name on the “Name” line must be the name shown on the income tax return on which the income will be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a domestic owner, the domestic owner’s name is required to be provided on the “Name” line. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity’s name on the “Business name/disregarded entity name” line. If the owner of the disregarded entity is a foreign person, you must complete an appropriate Form W-8.

Note. Check the appropriate box for the federal tax classification of the person whose name is entered on the “Name” line (Individual/sole proprietor, Partnership, C Corporation, S Corporation, Trust/estate).

Limited liability company (LLC). If the person identified on the “Name” line is an LLC, check the “Limited liability company” box only and enter the appropriate code for the tax classification in the space provided. If you are an LLC that is treated as a partnership for federal tax purposes, enter “P” for partnership. If you are an LLC that has filed a Form 8832 or a Form 2553 to be taxed as a corporation, enter “C” for C corporation or “S” for S corporation. If you are an LLC that is disregarded as an entity separate from its owner under Regulation section 301.7701-3 (except for employment and excise tax), do not check the LLC box unless the owner of the LLC (required to be identified on the “Name” line) is another LLC that is not disregarded for federal tax purposes. If the LLC is disregarded as an entity separate from its owner, enter the appropriate tax classification of the owner identified on the “Name” line.

Other entities. Enter your business name as shown on required federal tax documents on the “Name” line. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on the “Business name/disregarded entity name” line.

Exempt Payee

If you are exempt from backup withholding, enter your name as described above and check the appropriate box for your status, then check the “Exempt payee” box in the line following the “Business name/disregarded entity name,” sign and date the form.

Generally, individuals (including sole proprietors) are not exempt from backup withholding. Corporations are exempt from backup withholding for certain payments, such as interest and dividends.

Note. If you are exempt from backup withholding, you should still complete this form to avoid possible erroneous backup withholding.

The following payees are exempt from backup withholding:

1. An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2),

2. The United States or any of its agencies or instrumentalities,

3. A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities,

4. A foreign government or any of its political subdivisions, agencies, or instrumentalities, or

5. An international organization or any of its agencies or instrumentalities.

Other payees that may be exempt from backup withholding include:

6. A corporation,

7. A foreign central bank of issue,

8. A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States,

9. A futures commission merchant registered with the Commodity Futures Trading Commission,

10. A real estate investment trust,

11. An entity registered at all times during the tax year under the Investment Company Act of 1940,

12. A common trust fund operated by a bank under section 584(a),

13. A financial institution,

14. A middleman known in the investment community as a nominee or custodian, or

15. A trust exempt from tax under section 664 or described in section 4947.

Form W-9 (Rev. 1-2011) Page 4

The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 15.

IF the payment is for	THEN the payment Is exempt for
Interest and dividend payments	All exempt payees except for 9
Broker transactions	Exempt payees 1 through 5 and 7 through 13. Also, C corporations.
Barter exchange transactions and patronage dividends	Exempt payees 1 through 5
Payments over $600 required to be reported and direct sales over $5,0001	Generally, exempt payees 1 through 72

¹  See Form 1099-MISC, Miscellaneous Income, and its instruction.

²  However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney, and payments for services paid by a federal executive agency.

Part I. Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.

If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN.

If you are a single-member LLC that is disregarded as an entity separate from its owner (see Limited Liability Company (LLC) on page 2), enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.

Note. See the chart on page 4 for further clarification of name and TIN combinations.

How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration office or get this form online at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer Identification Number (EIN) under Starting a Business.

You can get Forms W-7 and SS-4 from the IRS by visiting IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

If you are asked to complete Form W-9 but do not have a TIN, write “Applied For” in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.

Note. Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.

Caution: A disregarded domestic entity that has a foreign owner must use the appropriate Form W-8.

Part II. Certification

To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, below, and items 4 and 5 on page 4 indicate otherwise.

For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on the “Name” line must sign. Exempt payees, see Exempt Payee on page 3.

Signature requirements. Complete the certification as indicated in items 1 through 3, below, and items 4 and 5 on page 4.

1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.

2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.

3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.

4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).

Form W-9 (Rev. 1-2011) Page 5

5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.

What Name and Number To Give the Requester
For this type of account:		Give name and SSN of:
1.	Individual	The individual
2.	Two or more individuals joint account)	The actual owner of the account or, if combined funds, the first individual on the account1
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor2
4.	a. The usual revocable savings trust (grantor is also trustee)	The grantor-trustee1
	b. So-called trust account that is not a legal or valid trust under state law	The actual owner1
5.	Sole proprietorship or disregarded entity owned by an individual	The owner3
6.	Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulation section 1.671-4(b)(2)(i)(A))	The grantor*
	For this type of account:	Give name and EIN of:
7.	Disregarded entity not owned by an individual	The owner
8.	A valid trust, estate, or pension trust	Legal entity4
9.	Corporate or LLC electing corporate status on Form 8832 or Form 2553	The corporation
10.	Association, club, religious, charitable, educational, or other tax-exempt organization	The organization

11.	Partnership or multi-member LLC	The partnership
12.	A broker or registered nominee	The broker or nominee
13.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity
14.	Grantor trust filing under the Form1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulation section 1.671-4(b)(2)(i)B))	The trust

1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.

2 Circle the minor’s name and furnish the minor’s SSN.

3 You must show your individual name and you may also enter your business or “DBA” name on the “Business name/disregarded entity” name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.

4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships on page 1.

* Note. Grantor also must provide a Form W-9 to trustee of trust

Note. If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.

Secure Your Tax Records from Identity Theft

Identity theft occurs when someone uses your personal information such as your name, social security number (SSN), or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.

To reduce your risk:

• Protect your SSN,

• Ensure your employer is protecting your SSN, and

• Be careful when choosing a tax preparer.

If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.

If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact

Form W-9 (Rev. 1-2011) Page 6

the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039. For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance.

Victims of identity theft who are experiencing economic harm or a system problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other lRS property to the Treasury Inspector General for Tax Administration at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at: spam@uce.gov or contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338).

Visit IRS.gov to learn more about identity theft and how to reduce your risk.

Privacy Act Notice

Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.

EX-99.8

Exhibit 99.8

Member		Tel (804) 780-3230
NYSE/SIPC	Richmond, Virginia 23219	FAX (804) 649-0990

March 19, 2012

Board of Directors

New Peoples Bankshares, Inc.

67 Commerce Drive

P.O. Box 1810

Honaker, VA 24260

Members of the Board:

The Board of Directors (the “Board”) of New Peoples Bankshares, Inc., a Virginia corporation (the “Company”), has requested that Scott & Stringfellow, LLC (“Scott & Stringfellow”) provide to the Board our opinion (whether or not favorable) with regard to the fairness, from a financial point of view, to the Company and the current shareholders of the Company (other than Messrs. Lynn Keene and Scott White) of the per share price for the Company’s common stock (the “Common Stock”) proposed to be offered through an offering (the “Transaction”), on the terms and in the manner described in the draft prospectus contained in the draft registration statement on Form S-l attached hereto as Exhibit A (the “Registration Statement”).

Scott & Stringfellow understands that, as of the date hereof, Messrs. Keene and White, each a director of the Company, beneficially own, respectively, 0.51% and 3.82% of the outstanding Common Stock. Scott & Stringfellow also understands that, concurrent with the completion or termination of the Offering, and subject to any necessary regulatory approval, the Company will convert $5.45 million in indebtedness owed to Messrs. Keene and White, plus accrued interest, to Common Stock, on the terms and in the manner described in the Registration Statement. Scott & Stringfellow also understands that following the transaction, Messrs. Keene and White will beneficially own, respectively, a minimum of, assuming issuance of the Minimum Offering Amount (as such term is defined in the Registration Statement), 10.99% and 13.29% of the outstanding Common Stock and, assuming issuance of the Maximum Offering Amount (as such term is defined in the Registration Statement), 7.39% and 8.93%.

Scott & Stringfellow has acted as financial advisor to the Board in connection with the Transaction. As a customary part of our investment banking business, we regularly engage in the valuation of financial institutions and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements, valuations for estate, corporate and other purposes, and other corporate transactions. In the ordinary course of our business as a broker-dealer, we may, from time to time purchase securities from, and sell securities to, the Company, and as a market maker in securities, we may from time to time have a long or short position in, and buy, sell, or hold equity securities of the Company for our own account and for the accounts of our customers

Over the past two years, excluding in connection with the Transaction, Scott & Stringfellow has not received compensation for investment banking services from the Company. As of the date hereof, other than with respect to the Transaction, there are no material relationships mutually understood to be contemplated in which any compensation is intended to be received by us as a result of the relationship between us and any of the parties to the Agreement.

Board of Directors

New Peoples Bankshares, Inc.

March 19, 2012

Page 2 of 5

In connection with the Transaction and the preparation and delivery of this opinion, we have reviewed, analyzed, and relied upon, among other things:

i. The Registration Statement, in draft form;

ii. Certain publicly available financial information and other data with respect to the Company and its subsidiaries, including the Company’s audited financial statements for the fiscal years and quarters ended December 31, 2007 through December 31,2011, and other financial information and projections prepared by the Company, and made available to us, that we deemed relevant and meetings and discussions regarding the same with members of senior management of the Company;

iii. Certain internal financial analyses and forecasts for the Company related to the business, earnings, cash flows, assets and prospects of the Bank for the years ending December 31, 2012 and 2017 prepared and furnished by and reviewed with senior management of the Company (the “Forecasts”);

iv. The estimated pro forma financial impact of the Transaction on the Company, based on assumptions relating to, without limitation, transaction expenses and uses of proceeds determined by and reviewed with the senior management of the Company;

v. The historical market prices and trading activity for the Common Stock and other stock market information for the Company, including as compared to the historical market prices, trading activity and other stock market information of similar publicly-traded companies which we deemed to be relevant;

vi. The financial position and results of operation of the Company, including as compared to the financial position and results of operation of similar publicly-traded companies which we deemed to be relevant;

vii. The proposed financial terms of the Transaction and a comparison of such terms with the financial terms, to the extent publicly available, of certain recent securities offerings in the banking industry which we deemed to be relevant;

viii. Certain other summary materials and analyses with respect to the Company’s loan portfolio and other real estate owned, including but not limited to: (a) schedules of loans and other assets identified by management as deserving special attention or monitoring given the characteristics of the loan or asset and the local economy, (b) analyses concerning the adequacy of the allowance for loan losses, and (c) select third-party loan reviews prepared for Company management;

ix. The current market environment generally and the condition of the commercial banking industry in particular, as indicated in financial reports filed with various federal bank regulatory authorities by all federally-insured commercial banks; and

x. Such other information, financial studies, analyses, investigations, and financial, economic, and market criteria that we deemed relevant to this assignment.

Board of Directors

New Peoples Bankshares, Inc.

March 19, 2012

Page 3 of 5

We also held discussions with members of senior management of the Company regarding the reasons and basis for the Transaction and regarding the historical and current business operations, financial condition, results of operations, regulatory relationships and future prospects of the Company and such other matters as we have deemed relevant to our inquiry.

In conducting our review and arriving at our opinion, we have relied upon and assumed the accuracy and completeness of all of the financial and other information that was available to us from public sources, that was provided to us by the Company or its representatives, or that was otherwise reviewed by us (including the Forecasts), and we assumed such accuracy and completeness in rendering this opinion. We have further relied on the assurances of management of the Company that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. We have not been asked nor have we attempted independently to verily such information, and we assume no responsibility or liability for independently verifying the accuracy and completeness of such information. We did not make an independent evaluation or appraisal of any specific assets, any collateral securing assets or the liabilities, including any contingent, off-balance sheet assets or liabilities, of the Company or any of its subsidiaries. We did not make an independent evaluation of the adequacy of the allowance for loan losses of the Company nor have we reviewed any individual credit files relating to the Company. We assumed, with your consent, the allowance for loan losses of the Company is adequate to cover such losses and will be adequate for the Company on a pro forma basis after the Transaction and the use of proceeds therefrom. We also assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction, if any, will be obtained without any adverse effect on the Company or on the expected benefits of the Transaction. In connection with the preparation of our opinion, we were not authorized to solicit, nor did we solicit, potential investors or other parties regarding the Transaction or alternatives to the Transaction.

With respect to the financial projections (including the Forecasts) and earnings estimates for the Company and all projections of transaction costs and use of proceeds prepared by and/or reviewed with the management of the Company and used by Scott & Stringfellow in its analyses, the Company’s senior management confirmed to us that they have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the future financial performance of the Company following the Transaction, and we assumed that such financial performance would be achieved. We express no opinion as to such financial projections (including the Forecasts) or the assumptions or judgments on which they are based. We have assumed that there has been no material change in the assets, financial condition, results of operations, business or prospects of the Company since the date of the most recent financial statements made available to us. Moreover, we have assumed that the Transaction will be consummated upon the terms set forth in the Registration Statement without material alteration or waiver thereof, and that all information in the Registration Statement and in all related documents and instruments referred to in the Registration Statement are true and correct. Finally, with your consent, we have relied upon the advice the Company has received from its legal, accounting, and tax advisors as to all legal, accounting, and tax matters related to the Transaction.

Our opinion is necessarily based on, and we have necessarily taken into account, the financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. We are not legal, tax, regulatory, or bankruptcy advisors. We have not considered any legislative or regulatory changes recently adopted or currently being considered by the United States Congress, the various federal banking agencies, the Securities and Exchange Commission (the “SEC”), or any other regulatory bodies, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the SEC or the Financial Accounting Standards Board, or any changes in regulatory accounting principles that may be adopted by any or all of the federal banking agencies.

Board of Directors

New Peoples Bankshares, Inc.

March 19, 2012

Page 4 of 5

Our opinion is not a solvency opinion and does not in any way address the solvency or financial condition of the Company. Events occurring after the date hereof, and information unknown or not disclosed to us in the course of conducting our review and arriving at our opinion, could materially affect this opinion. We have no obligation to update, revise, reaffirm or withdraw this opinion, to perform further or additional reviews or analyses, or otherwise comment upon events occurring after the date hereof. We are expressing no opinion herein as to what the value of shares of the Company’s Common Stock will be when issued at any closing in connection with the Transaction or following the Transaction or the prices at which shares of the Company’s Common Stock may trade at any time.

The terms of the fee arrangement with Scott & Stringfellow, which Scott & Stringfellow and the Company believe are customary in transactions of this nature, were negotiated at arm’s length between the Company and Scott & Stringfellow, and the Board was aware of such arrangement. The Company also has agreed to reimburse Scott & Stringfellow for reasonable out-of-pocket expenses incurred in connection with its engagement and has agreed, or will agree, to indemnify Scott & Stringfellow and certain related persons against certain liabilities, including liabilities under the federal securities laws, in connection with our engagement for the delivery of this opinion.

Our opinion is directed to the Board in connection with its consideration of the Transaction and our opinion does not constitute a recommendation to any holder of the Company’s Common Stock as to whether or how such holder should participate in the Transaction. This opinion is not intended to, and does not, (i) create any rights or remedies for any person or entity, other than the Board or (ii) create any fiduciary duty on the part of Scott & Stringfellow to any party. Scott & Stringfellow was not retained as an advisor or agent to the Company’s shareholders or any other person, and it is acting only as a financial advisor to the Company’s Board of Directors. This opinion has been reviewed and approved by our Investment Banking Valuation Committee in conformity with our policies and procedures established under the requirements of FINRA Rule 5150 of the Financial Industry Regulatory Authority, Inc. Our opinion is limited and directed only to the fairness, from a financial point of view, to the Company and the current shareholders of the Company (other than Messrs. Lynn Keene and Scott White) of the per share price for the Company’s Common Stock proposed to be offered through the Transaction, on the terms and in the manner described in the Registration Statement, and does not address the underlying business decision by the Company to engage in the Transaction, the relative merits of the Transaction as compared to any other alternative business strategies or other strategic alternatives that might exist for the Company, the fairness of the amount or nature of any compensation to any of the officers, directors or employees of the Company, or class of such persons, relative to the compensation to the public holders of the Company Shares or the effect of any other transaction in which the Company might engage. Our opinion is not to be quoted or referred to, in whole or part, in a registration statement (other than the Registration Statement), prospectus (other than the prospectus contained in the Registration Statement), proxy statement or in any other document, nor shall this opinion be used for any other purposes, without Scott & Stringfellow’s prior written consent. Notwithstanding the foregoing, Scott & Stringfellow hereby consents to the inclusion of this opinion in any materials provided to the shareholders of the Company in connection with the Transaction.

Board of Directors

New Peoples Bankshares, Inc.

March 19, 2012

Page 5 of 5

Based upon and subject to the foregoing, it is our opinion, as of the date hereof, that the per share offering price of $1.50 for shares of Common Stock of the Company in the Transaction is fair, from a financial point of view, to the Company and the current shareholders of the Company (other than Messrs. Lynn Keene and Scott White).

Very truly yours,

David M. Wojdyla

Vice President

Scott & Stringfellow, LLC