CAPITAL

3 Months Ended

Mar. 31, 2018

Capital [Abstract]

CAPITAL

NOTE 4 CAPITAL:

The Bank is subject to various capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum ratios of Tier 1 and total capital as a percentage of assets and off-balance sheet exposures, adjusted for risk weights ranging from 0% to 1250%. Tier 1 capital consists of common stockholders’ equity, excluding the unrealized gain or loss on securities available-for-sale, minus certain intangible assets. Tier 2 capital consists of the allowance for loan losses subject to certain limitations. Total capital for purposes of computing the capital ratios consists of the sum of Tier 1 and Tier 2 capital. The Bank is also required to maintain capital at a minimum level based on quarterly average assets, which is known as the leverage ratio.

The Company meets eligibility criteria of a small bank holding company in accordance with the Federal Reserve Board’s Small Bank Holding Company Policy Statement issued in February 2015, and is no longer obligated to report consolidated regulatory capital. The Bank’s actual capital amounts and ratios are presented in the following table as of March 31, 2018 and December 31, 2017, respectively. These ratios comply with Federal Reserve rules to align with the Basel III Capital requirements effective January 1, 2015.

		Actual		Minimum Capital Requirement		Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars are in thousands)	Amount		Ratio	Amount	Ratio	Amount	Ratio
March 31, 2018:
Total Capital to Risk Weighted Assets:
New Peoples Bank, Inc.	$	68,976	15.21%	$         36,273	8.0%	$      45,341	10.0%
Tier 1 Capital to Risk Weighted Assets:
New Peoples Bank, Inc.		63,331	13.97%	27,205	6.0%	36,273	8.0%
Tier 1 Capital to Average Assets:
New Peoples Bank, Inc.		63,331	9.56%	26,505	4.0%	33,131	5.0%
Common Equity Tier 1 Capital  to Risk Weighted Assets:
New Peoples Bank, Inc.		63,331	13.97%	20,403	4.5%	29,472	6.5%
December 31, 2017:
Total Capital to Risk Weighted Assets:
New Peoples Bank, Inc.	$	68,787	15.30%	$        35,970	8.0%	$      44,962	10.0%
Tier 1 Capital to Risk Weighted Assets:
New Peoples Bank, Inc.		63,160	14.05%	26,977	6.0%	35,970	8.0%
Tier 1 Capital to Average Assets:
New Peoples Bank, Inc.		63,160	9.56%	26,422	4.0%	33,028	5.0%
Common Equity Tier 1 Capital  to Risk Weighted Assets:
New Peoples Bank, Inc.		63,160	14.05%	20,233	4.5%	29,225	6.5%

As of March 31, 2018, the Bank was well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and Common Equity Tier 1 ratios as set forth in the above tables. There are no conditions or events since the notification that management believes have changed the Bank’s category.

Under Basel III Capital requirements, a capital conservation buffer of 0.625% became effective beginning on January 1, 2016. The capital conservation buffer will be gradually increased through January 1, 2019 to 2.5%. Banks will be required to maintain levels that meet the required minimum plus the capital conservation buffer in order to make distributions, such as dividends, or discretionary bonus payments.