RETIREMENT AND OTHER BENEFIT PLANS

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

RETIREMENT AND OTHER BENEFIT PLANS

NOTE 13 RETIREMENT AND OTHER BENEFIT PLANS

The Company has established a qualified defined contribution plan that covers all full-time employees. The Company matches employee contributions up to a maximum of 6% and 3% of their salary for 2023 and 2022, respectively. The Company contributed approximately $519,000 and $235,000 to the defined contribution plan during the years ended December 31, 2023 and 2022, respectively.

On February 27, 2023, the Board of Directors approved and adopted the New Peoples Bankshares, Inc. Long-Term Cash Incentive Plan (the “Plan”). The Plan provides for cash incentive awards to Plan participants based on the Company’s quarterly earnings per share of common stock over the period specified in the Plan. Certain members of management are eligible to participate in the Plan. Individual awards are settled solely in cash, determined by multiplying quarterly earnings per share by the number of notional shares covered by a Plan award. Awards for up to 500,000 notional shares of common stock of the Company, adjusted to 750,000 shares in December 2023, may be granted under the Plan. The Plan does not grant participants equity in the Company and does not create any shareholders’ rights. For each award, a participant receives an allocation equal to earnings per share, for each share covered by the award, on a quarterly basis. Awards become vested in 25% increments, on each of the first through fourth anniversaries of the date of grant, subject to a participant’s continuous employment with the Company through the applicable anniversary. Awards are settled on the earliest of a participant’s separation from service, a change in control, or the ten-year anniversary of the Plan’s effective date. Vested portions of an award are generally paid in three installments. As of December 31, 2023, 500,000 notional shares have been awarded and a $55,000 liability was recorded.

The Bank maintains a salary continuation plan for key executives which was established in 2002 and is funded by single premium life insurance policies. Expenses related to the plan were approximately $26,000 and $27,000 for the years ended December 31, 2023 and 2022, respectively.