As filed with the Securities and Exchange Commission on ~~June 18, 2002~~ March 29, 2012

(Exact name of registrant as specified in its charter) Virginia 6022 54-1880861 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) 2 Gent

(Address, including zip code and telephone number, including area code, of ~~registrant's~~registrant’s principal executive offices) ~~Kenneth D. Hart~~

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

Copies ~~of Communications~~ to: Wayne A. Whitham, Jr., Esq. John M. Oakey, III, Esq. Williams Mullen 1021 East Cary Street P.O. Box 1320 Richmond, Virginia 23218-1320 (804) 643-1991 =============

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. |X|~~ 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. ~~|_| If delivery~~¨

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 ~~prospectus is expected to be made pursuant to Rule 434, check the following box. |_|~~ Exchange Act. (Check one):

=================================================================================================================== Proposed Maximum Proposed Maximum Amount
(1)	This registration statement relates to (a) shares of ~~Title~~our common stock, including shares received by two directors upon conversion of ~~Each Class~~their loans to the Company into common stock; (b) subscription rights to purchase shares of ~~Amount~~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.

The ~~Registrant~~registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the ~~Registrant~~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. ~~================================================================================~~

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. ~~SUBJECT TO COMPLETION, DATED , 2002~~

Up to $25,000,000.50 of Common Stock ~~We own and operate New Peoples Bank, Inc., which has eight banking offices in the southwest Virginia area and~~at a Subscription Price of $1.50 per share

For every five Shares purchased, one ~~banking office in West Virginia.~~ 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 ~~1,200,000~~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. There is no established market for our common~~ stock issued and ~~we do not expect that~~outstanding. We must sell a ~~market will develop after this~~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 ~~have established~~refer to the sale of 6,666,667 shares or $10,000,000.50 as the minimum of the offering ~~price~~range (the “Minimum Offering Amount”), and the sale of ~~$10.00 per share. During 2002,~~16,666,667 shares or $25,000,000.50 as the ~~price in sales~~maximum of the offering range (the “Maximum Offering Amount”).

Each subscription right will entitle you to purchase 1.665 shares of our common stock ~~known~~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 ~~us has ranged from $10.00~~exercise an over-subscription privilege (the “Over-Subscription Privilege”), subject to ~~$12.00~~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 ~~make offers~~we extend the rights offering beyond [August 15,] 2012.

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 ~~all~~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 ~~existing shareholders.~~ 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 ~~these offers and sales,~~this offering, we will ~~make offers and sales to the public in Tennessee, Virginia and West Virginia. All sales will~~ be ~~made by certain~~issuing 3,633,333 shares of ~~our employees. There is no underwriter involved in this offering. Investing in~~ our common stock ~~involves risks.~~ 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 ~~read~~carefully consider whether to exercise your subscription rights prior to the ~~"Risk Factors" section beginning~~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 ~~page 7 before investing.~~ 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 ~~common stock~~accuracy or ~~determined if~~adequacy of this ~~prospectus is truthful or complete.~~prospectus. Any representation to the contrary is a criminal offense. ~~In addition,~~

The shares of our common stock are not deposits or ~~accounts~~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 agency. Underwriter's Price to Public Commission Proceeds to Us -------------- ---------- -------------- Per Share $ 10.00 -- $ 10.00 Total $ 12,000,000 -- $ 12,000,000 This is a best efforts offering, which meansentity.

We anticipate that ~~we are not required to sell any specific number of~~ shares ~~or dollar amount of common stock~~purchased in this ~~offering. We~~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 ~~made any arrangements~~prior to ~~place funds received from investors in an escrow, trust or similar account. The offering will end on ________ __, 2002, unless we extend it until ________ __, 2002.~~ the expiration of the rights offering).

The date of this prospectus is ~~________ __, 2002.~~ ~~[INSIDE FRONT COVER] [MAP OF MARKET AREA] 2~~ 2012.

TABLE OF CONTENTS Page Prospectus Summary............................................................4 Summary Financial Information.................................................6 Risk Factors..................................................................7 Terms of the Offering.........................................................9 Use of Proceeds..............................................................10 Determination of Offering Price..............................................10 Dilution.....................................................................11 Market for Common Stock......................................................13 Dividend Policy..............................................................13 Capitalization...............................................................14 Business.....................................................................15 Selected Historical Financial Information....................................20 Management's Discussion and Analysis of Financial Condition and Results of Operations................................21 Management...................................................................37 Description of Capital Stock.................................................41 Government Supervision and Regulation........................................42 Legal Matters................................................................46 Experts......................................................................46 Caution About Forward Looking Statements.....................................46 Where You Can Find More Information..........................................47 Index to Consolidated Financial Statements..................................F-1

You should rely only ~~rely~~ 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, ~~different from that contained in this prospectus.~~you should not rely on it. We are ~~offering~~not making an offer to sell ~~and seeking offers~~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 ~~buy, shares of our common stock only in jurisdictions where offers and sales are permitted.~~do so or to any person to whom it is unlawful to make such offer or solicitation. The information ~~contained~~that appears in or is incorporated by reference into this prospectus ismay only be accurate ~~only~~or complete as of the date of this prospectus ~~regardless~~or the date of the ~~time~~document in which incorporated information appears. Our business, financial condition, liquidity, results of ~~delivery~~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 orto be advice of any ~~sale~~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. In

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 ~~frequently use~~have not independently investigated or verified this information.

Unless the ~~terms "we," "our" and "us"~~context requires otherwise or unless otherwise noted:

Below are answers to what we anticipate will be common questions about the rights offering ~~you should read this entire document carefully, including particularly~~and the ~~"Risk Factors" section beginning~~public offering. The answers are based on ~~page 7. 3~~ ~~- -------------------------------------------------------------------------------- PROSPECTUS SUMMARY This summary highlights~~selected information ~~contained~~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.

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.

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.

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.”

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.

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:

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

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.

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:

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.

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.

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

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.

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.

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.”

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.

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.”

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.

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.

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.

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.”

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.

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.”


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

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

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 ~~that may be~~ important to you. Therefore, to understand this offering fully, you should read ~~this~~the entire prospectus carefully before making a decision to invest in our common stock, including the risks ~~of purchasing common stock~~ discussed under the ~~"Risk Factors"~~“Risk Factors” section and the information incorporated by reference in this prospectus, including our audited consolidated financial statements and ~~related notes.~~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 ~~have adjusted all share amounts~~provide financial services to individuals, small to medium-size businesses, and ~~per share data relating to~~the professional community within our ~~common stock in this prospectus to reflect a two-for-one stock split of~~local markets. We conduct our ~~common stock in January 2002. Our Company We own~~operations primarily through our wholly-owned subsidiary, New Peoples Bank, Inc., a ~~Virginia-chartered~~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,

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 ~~bank.~~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 ~~conduct all~~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 ~~business~~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.

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 ~~bank,~~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 ~~operates~~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.

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 ~~banking offices~~full-time employees;

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 ~~southwest Virginia~~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 ~~one banking office~~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 ~~West Virginia. We opened in October 1998~~this offering, we believe that our capital levels will be at levels sufficient to ~~fill a demand for community banking services in Russell, Scott, Buchanan and Dickenson Counties in southwest Virginia. We commenced operations with~~satisfy our ~~main office and two branches~~current regulatory requirements.

Supervisory Actions

On August 4, 2010, we entered into and have since ~~opened six additional branches.~~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 ~~plan~~believe we have made good progress in our compliance efforts under the Formal Agreement, and we believe all of the written plans required to ~~open three additional branches~~date, as discussed in the ~~second half of 2002. We attained profitability~~following paragraph, have been submitted on a ~~month-to-month basis by September 1999,~~timely basis.

Under the terms of the Formal Agreement, the Bank agreed to develop and ~~we had recouped all~~submit for approval within specified time periods written plans to: (a) strengthen the board of ~~our start-up losses by March 2001. Our financial performance~~directors oversight of management and the

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 ~~characterized~~criticized by ~~rapid asset growth, increasing earnings~~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 ~~sound asset quality. At March 31, 2002,~~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 ~~had total assets~~are in compliance with these requirements.

Under the terms of ~~$226.4 million, net loans~~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 ~~$187.9 million, deposits~~payment representing a reduction in the Bank’s capital or make any distributions of ~~$205.3 million~~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 ~~stockholders' equity~~has agreed not to purchase or redeem any shares of ~~$19.5 million.~~ 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 ~~2 Gent~~67 Commerce Drive, Honaker, Virginia 24260, and our telephone number is (276) 873-6288. ~~Our Internet address is www.newpeoplesbank.com. The information contained~~Information on our ~~web site~~websites, www.npbankshares.com and www.newpeoplesbank.com, is not incorporated herein by reference and are not part of this prospectus. ~~- -------------------------------------------------------------------------------- 4~~ ~~- -------------------------------------------------------------------------------- The Offering Common Stock Offered............... 1,200,000~~

An investment in the shares ~~at $10.00 per share. Minimum Purchase................... 100 shares. Maximum Purchase................... 10,000 shares. Common Stock Outstanding After~~involves various risks. You should carefully consider the ~~Offering................. 7,200,000 shares.~~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.

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 ~~May 31, 2002, there were vested options outstanding~~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 ~~256,000~~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.

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

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. All outstanding options are exercisable~~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 ~~$7.50.~~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:

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

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

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.

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

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.

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.

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.

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 ~~Procedures................ Each prospective investor~~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 ~~wishes~~participated in the Capital Purchase Program have repaid their borrowed Capital Purchase Program funds to ~~purchase~~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

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.

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.

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 ~~must return~~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 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 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

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 ~~card~~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.

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 ~~included~~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 ~~this prospectus to us. See "Terms~~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 ~~Offering"~~written plans required to date, as discussed in the following paragraph, have been submitted on ~~page 9~~a timely basis.

Under the terms of the Formal Agreement, the Bank agreed to develop and submit for ~~additional information. Use~~approval within specified time periods written plans addressing a number of ~~Proceeds....................~~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 ~~intend~~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 ~~purposes, including providing~~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 ~~equity~~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~~Bank.

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 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 ~~future growth. Purchases by Our Management~~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 ~~Offering......... Our directors~~market made after this offering or the perception that such sales could occur.

If you do not act promptly and ~~executive officers have indicated that they intend~~follow the subscription instructions, your exercise of subscription rights may be rejected.

Eligible shareholders who desire to purchase shares of common stock in ~~this offering. Although~~ the ~~exact number~~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 ~~has not been determined, we currently anticipate~~of common stock, you must act promptly to ensure that ~~they will purchase approximately 50,000 shares in this offering. This amount represents 4.17%~~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 ~~common stock~~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 ~~offering. None of our directors and executive officers have~~we under any obligation to ~~purchase shares~~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. Dividends.......................... Currently no dividends are paid to shareholders. - -------------------------------------------------------------------------------- 5 ~~SUMMARY~~See, “Certain U.S. Federal Income Tax Consequences.”

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 ~~also~~ 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.~~ prospectus by reference.

Three Months Year Ended Ended March 31 December 31, -------------- ------------ (unaudited) (audited) ---------- 2002 2001 2001 2000 1999 ----------------------------------------------------------- (Dollars in thousands, except per share data) Income Statement Data Gross interest income $ 3,970 $ 3,551 $ 15,267 $ 11,228 $ 5,454 Gross interest expense 1,575 2,054 7,950 6,325 2,943 Net interest income 2,395 1,497 7,317 4,903 2,511 Provision for possible loan losses 130 159 571 513 867 Net interest income after provision for loan losses 2,265 1,338 6,746 4,390 1,644 Non-interest income 299 128 753 444 243 Non-interest expense 1,695 1,181 5,934 3,683 2,644 Income (loss) before income taxes 869 285 1,565 1,150 (757) Income tax expense (benefit) 290 95 556 389 (433) Net income (loss) 579 190 1,009 761 (324) Per Share Data and Shares Outstanding
(1) Net income, basic .10 .03 .17 .16 (.14) Net income, diluted .10 .03 .17 .16 (.14) Cash dividends 0 0 0 0 0 Book value at period end 3.24 3.01 3.15 2.98 2.32 Tangible book value at period end 3.24 3.01 3.15 2.98 2.32 Weighted average shares outstanding, basic (1) 6,000 6,000 6,000 5,400 2,300 Weighted average shares outstanding, diluted (1) 6,073 6,000 6,000 5,400 2,300 Shares outstanding at period end (1) 6,000 6,000 6,000 6,000 2,400 Period-End Balance Sheet Data Total assets 226,413 171,705 214,253 157,390 99,081 Total loans 189,763 146,214 179,216 131,086 86,560 Total deposits 205,324 152,525 194,011 138,447 87,490 Long-term debt 0 0 0 0 0 Shareholders' equity 19,470 18,072 18,891 17,882 11,121 Performance Ratios Return on average assets 1.05% .46% .54% .58% (.45)% Return on average shareholders' equity 12.01% 4.21% 5.47% 5.26% (3.11)% Average shareholders' equity to average total assets 8.72% 10.95% 9.91% 11.10% 14.38%	Net interest margin ~~(2) 4.86% 3.88% 4.31% 3.99% 3.78% Asset Quality Ratios Net charge-offs to~~is calculated as tax-equivalent net interest income divided by average loans .05% .02% .06% .06% .00% Allowance to period-end gross loans 1.00% 1.00% 1.00% 1.00% 1.00% Nonperformingearning assets ~~to gross loans~~ and foreclosed properties .03% .16% .04% .07% .00% Capital and Liquidity Ratios Risk-based Tier 1 capital 10.88% 13.60% 10.99% 15.24% 13.60% Total capital 11.94% 14.71% 12.03% 16.36% 14.70% Leverage capital ratio 8.83% 10.97% 9.19% 11.73% 11.45% Total equity to total assets 8.60% 10.53% 8.82% 11.36% 11.22% represents our net yield on our earning assets.

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 ~~per share data~~unknown risks, uncertainties and other factors that could cause the actual results to ~~reflect a two-for-one stock split~~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:

in the ~~over-the-counter market,~~near future, achieving the cost savings we ~~cannot be certain that~~project without customer rejection as we close unprofitable branches, and, in the prices at which our stock has historically sold are not higher than the prices that would prevail in an active market where securities professionals participate. We set the offering price ourselves without assistance from an underwriter. When an underwriter is involved in an offering, the offering price reflects market forces at work. An underwriter works with an issuer to price an offering, based on factors that include demand for the shares from securities dealers and the underwriter's analysis of the issuer's past and prospective financial performance. This is an imperfect process, but it does afford some protection to purchasers that the offering price is a market price. In this offering, no underwriter is involved. Because there is no market for our stock, your ability to readily sell any shares you purchase is doubtful. Our stock is not listed on a stock market, and we have no intention of listing it. If you want to sell shares you purchase in this offering, you will need to find a buyer and negotiate the price. As we mature, we may not be able to sustain the rapid growth that we have experienced since inception. During the last two years, we have experienced significant growth, and our business strategy calls for continued expansion. We intend to use the funds raised in this offering to support anticipated increases in our loans and deposits. Our ability to continue to grow depends, in part, upon our ability to open new branch offices, attract deposits to those locations, and identify loan and investment opportunities. Our ability to manage growth successfully also will depend on whether we can maintain capital levels adequate to support our growth and maintainlonger term maintaining cost controls and asset ~~quality. If~~qualities as we ~~are unable to sustain our growth, our earnings could be adversely affected. If we grow too quickly, however,~~open or acquire new branches;

changes in interest rates and are not able to control costs and maintain asset quality, rapid growth also could adversely affect our financial performance. We have a limited operating history upon which to base an estimate of our future success. We have been operating only since October 1998. As a result, you have limited financial information on which to base any estimate of our future performance. The financial statements presented in this prospectus may not be as meaningful as those of a company that has a longer history of operations. Because of our limited operating history, you do not have access to the type and amount of information that would be available to an investor in a financial institution with a more extended operating history. Our profitability depends significantly on economic conditions in our market area. Our success depends to a large degree on the general economic conditions in the southwest Virginia area. The local economic conditions in this area have a significant impact on the loans that we 7 make to our borrowers, the ability of our borrowers to repay these loans and the value of the collateral securing these loans. A significant decline in general economic conditions caused by inflation, recession, unemployment or other factors beyond our control would impact these local economic conditions and could negatively affect our financial condition and performance. Historically, coal mining and farming have represented the primary industries in our market area. While the coal mining industry has been depressed in recent years, new industries, including the automobile industry and technology and communications business, have appeared in our market area. While we do not have significant credit exposure to these businesses, a recession in one or more of these industries could have a negative impact on local economic conditions and real estate collateral values generally, which could negatively affect our profitability. Because of the uncertainty of future economic and market conditions, we may not be able to obtain additional capital on terms as favorable as the terms on prior offerings. Our business strategy calls for continued growth. We anticipate that we will support this growth through additional deposits at new branch locations and investment opportunities. It is possible that we may need to raise additional capital to support our future growth. Our ability to raise capital through the sale of additional securities will depend primarily upon our financial condition and the condition of financial markets at that time. We cannot make any assurance that additional capital would be available on terms satisfactory to us at all. The failure to raise additional capital on terms that are favorable to us may force us to limit our growth strategy. A loss of our senior officers could impair our relationship with our customers and adversely affect our business. Many community banks attract customers based on the personal relationships that the banks' officers and customers establish with each other and the confidence that the customers have in the officers. As a relatively new enterprise, we depend on the performance of Kenneth D. Hart, who is our and the bank's President and Chief Executive Officer. Mr. Hart has over 30 years of experience in the banking industry and has numerous contacts in our market area. We believe that the extent of his experience and contacts provide us with an advantage over other community banks in our market, who have chief executive officers with less experience and fewer contacts. The loss of the services of Mr. Hart, or his failure to perform management functions in the manner anticipated by our board of directors, could have a material adverse effectinterest rate policies;

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.

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 ~~have~~retain broad discretion in ~~allocating~~deciding how to allocate the proceeds of this offering. We expect, however, that the ~~offering and could delay the achievement~~proceeds of ~~our strategic goals. We will use the net proceeds from~~ 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 ~~purposes. That is,~~uses. Before we apply any of the proceeds for any of these uses, we likely will ~~provide additional equity~~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 ~~bank to support anticipated~~related impact on our financial condition. Our capital position has been impacted by increases in our ~~loans~~provision for loan losses due to the overall economy and ~~deposits as our business grows.~~deteriorating real estate market conditions. We have not otherwise made a specific allocation for the use of the ~~net~~ proceeds. ~~Subject to the requirements~~

The subscription price for a share of ~~safe and sound banking practices, however,~~ our ~~management will have discretion in~~common stock is $1.50.

In determining the ~~specific use~~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, ~~proceeds.~~our common stock will trade at or above the subscription price in any given time period. The discretion of management to allocate the proceeds of the offering may result in the use of the proceeds for non-banking activities that are permitted for bank holding companies, but that are not otherwise specifically identified in this prospectus. While we do not anticipate that these proceeds will be used for other purposes, to the extent 8 that they are, it may take us longer to grow our business and operations and otherwise achieve our strategic goals. TERMS OF THE OFFERING Purchase Limitations The minimum subscription for the offering is 100 shares. To increase participation and ownership within our local community, we are limiting the maximum number of shares that one individual or entity may directly acquire to 10,000 shares. Prospective Investors We will offer and sell shares to allmarket price of our ~~existing shareholders. In addition, we will make offers and sales~~common stock may decline during or after the offering. You may not be able to sell the ~~public in Tennessee, Virginia and West Virginia. In this offering, we are reserving the right, in our sole discretion, to accept or reject any subscription for~~ 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.

We retained S&S to provide financial advisory services to us in ~~whole~~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

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 ~~in part. With respect~~opinion constituting a recommendation or advice to ~~any subscriptions that we do not accept in whole~~us or ~~in part, we will return the unaccepted portion~~our shareholders. S&S expresses no opinion and makes no recommendation to holders of the subscription ~~funds, without interest. Plan of Distribution We will offer and sell shares of common stock through certain of our employees, who will not receive any sales commission directly~~rights or indirectly for offering or selling the shares. We will not offer or sell shares of common stock through any underwriters or dealers. This is a best efforts offering, which means that we are not required to ~~sell any specific number of shares or dollar amount of common stock in this offering. We have not made any arrangements to place funds received from~~other investors in an escrow, trust or similar account. Termination The offering will terminate on ________ __, 2002. We reserve the right to extend the offering in our sole discretion until ________ __, 2002 if we have not sold all 1,200,000 shares of common stock. Purchase Procedures Each prospective investor who wishes to purchases shares of our common stock must take the following steps: o Complete, date and execute the subscription card that we have included with this prospectus. o Return the completed subscription card, with a check payable to "New Peoples Bankshares, Inc." in an amount equal to $10.00 multiplied by the number of shares subscribed for, to Ms. Sereada Schiano New Peoples Bankshares, Inc. 2 Gent Drive Honaker, Virginia 24260 9 ~~We will issue and deliver certificates that evidence shares of our common stock duly subscribed for and paid in full to those subscribers whose subscriptions we accept~~ as soon as practicable after the offering is completed. No Escrow Account We have not made any arrangements to place funds received from investors in an escrow, trust or similar account. Once we have accepted a subscription, we will deposit the proceeds into our general corporate accounts, issue the shares of common stock to the investor and use the proceeds in the manner that we have described in this prospectus. USE OF PROCEEDS The following table sets forth the calculation of our net proceeds from the offering at the public offering price of $10.00 per share and the use of these proceeds. Because this is a best efforts offering and there is no minimum number of shares to be sold, we are presenting this information assuming that we sell 10%, 50% and 100% of the shares of common stock that we are offering.

We will use the net proceeds from this offering for general corporate purposes. That is, we will use all of the proceeds to provide additional equity capital to the bank to support anticipated increases in our loans and deposits as our business grows. We have not otherwise made a specific allocation for the use of the net proceeds. DETERMINATION OF OFFERING PRICE We have set the offering price for the shares of common stock offeredpurchase by this prospectus at $10.00 per share. The factors that we considered in making this determination were our present earnings and prospects for future earnings, our proposed operations in the future, the present state of our development and growth, the prospects of the banking industry in which we compete, the high demand for shares of our common stock, recent sales pricesany person of shares of our common ~~stock and an overall assessment of our management and financial condition. Because~~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 ~~expected to take place 10~~ ~~over~~not conditioned on consummation of the offering or subscription for a ~~period~~certain number of ~~several months, sales prices~~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 in privately negotiated transactions could vary during the offering. DILUTION Effect of the Offering on Book Value At March 31, 2002, we had a net tangible book value of approximately $19.5 million,stock. S&S has no obligation to take or $3.25 per share. Net tangible book value per share represents the amount of our shareholders' equity, less intangible assets, divided by the number of shares of common stock that are outstanding. Dilution per share to new investors in the offering represents the difference between the amount per share that these investors paid and the pro forma net tangible book value per share of common stock immediately after completion of the offering. After giving effect to the sale by us of all 1,200,000purchase any shares of common stock in connection with the ~~offering at~~offering.

We have agreed to indemnify S&S against certain liabilities and expenses in connection with its engagement, including certain potential liabilities under the ~~public offering price of $10.00 per share, deducting estimated offering expenses, and giving effect to the application of the estimated net proceeds described~~federal securities laws.

S&S may in the "Use of Proceeds" section on page 10, our pro forma net tangible book value at March 31, 2002 would have been approximately $31.4 million, or $4.36 per share. This represents an immediate increase in net tangible book value of $1.11 per share to existing shareholders and an immediate dilution of $5.64 per share to new investors. The following table illustrates this per share dilution assuming that we sell 10%, 50% and 100% of the shares of common stock that we are offering:

Comparison of Prices Paid for Common Stock The following table sets forth on a pro forma basis, as of March 31, 2002: o the number of shares of common stock purchased from us prior to the offering and the number of shares purchased in the offering, and o the total consideration, prior to the deduction of any expenses, and average price per share that our existing shareholders have paidfuture provide other investment banking services to us and ~~that new investors~~ will ~~pay in the offering at the public offering price of $10.00 per share. 11~~ Because this is a best efforts offering and there is no minimum number of shares to be sold, we are presenting this information assuming that we sell 10%, 50% and 100% of the shares of common stock that we are offering.

(1) We have adjusted the number of shares purchased and the average price per share to reflect a two-for-one stock split of our common stock in January 2002. (2) We have excluded outstanding vested options to purchase 256,000 shares of our common stock. The exercise pricereceive compensation for ~~each of these options is $7.50 per share. 12~~ such services.

Our stock is ~~no public trading market for shares of~~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 ~~prior~~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 ~~holding company reorganization in November 2001, there was no public~~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 ~~shares of New Peoples Bank's common stock. We, however, are frequently informed of~~prices at or above the ~~sales~~ price at which ~~shares of our~~the common stock ~~are exchanged~~is offered in ~~privately negotiated transactions.~~ this offering.

The high and low ~~trade~~ prices ~~of shares of the bank's common stock through November 2001 and~~at which our common stock ~~since November 2001,~~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 ~~knowledge, were as follows:~~

* Westock transfer agent of shareholders transferring stock. Other transactions may have ~~adjusted all~~occurred at prices ~~to reflect two-for-one stock splits of the bank's common stock in March 2000 and our common stock in January 2002.~~ about which we are not aware.

The most recent sales price of which ~~we are~~management is aware was ~~$10.00~~$3.00 per share on ~~May 28, 2002. Other sales transactions may have occurred that~~February 6, 2012.

On , 2012, there were ~~not reported~~approximately 4,431 shareholders of record.

In order to ~~us. DIVIDEND POLICY We~~preserve capital to support our growth in the past we have not ~~declared or distributed any~~paid cash dividends. The declaration of dividends to our shareholders, and it is not likely that we will declare any cash dividends for several years. Our board of directors intends to follow a policy of retaining any earnings to provide funds to operate and expand our business forin the ~~foreseeable future. Our~~ future ~~dividend policy is subject to the discretion of the board of directors and~~ will depend ~~upon a number of factors, including future consolidated~~on our earnings ~~financial condition, liquidity~~ and capital requirements ~~of both us~~ and the bank, applicable governmental regulations and policies and other factors deemed relevant by our board of directors Our ability to distribute cash dividends will depend primarily on the abilities of the bank to pay dividends to us. As a state member bank, New Peoples Bank iscompliance with regulatory mandates. We are subject to certain restrictions imposed by the reserve and capital requirements of federal and Virginia banking statutes and regulations. ~~Furthermore, neither~~Moreover, the Formal Agreement we ~~nor~~have with the ~~bank may declare or pay a~~banking regulators prohibits the Company from paying any cash ~~dividend on any of our capital stock if we are insolvent or if~~dividends and the ~~payment of the dividend would render us insolvent or unable~~Bank’s ability to pay ~~our obligations 13~~ dividends to the Company. So long as ~~they become due~~these restrictions remain in place the ~~ordinary course of business. For additional information~~Company will not pay any cash dividends. Thereafter, the Company may or may not pay cash dividends depending on ~~these limitations, see "Government Supervision~~various factors including capital needs, earnings, and ~~Regulation - Payment of Dividends" on page 42. CAPITALIZATION The following table sets forth~~other factors our consolidated capitalization at March 31, 2002. This table should be read with our financial statements and related notes included in this prospectus. March 31, 2002 Stockholders' equity (dollars in thousands): (unaudited) Common Stock, $2.00 par value, 12,000,000 12,000,000 shares authorized, 6,000,000 shares issued and outstanding Paid-in surplus 5,964,331 Retained earnings 1,505,845 Total stockholders' equity 19,470,176 14 BUSINESS General We are the bank holding company for New Peoples Bank, Inc., a Virginia banking corporation headquartered in Honaker, Virginia. We are engaged in the commercial banking business, primarily serving Russell, Scott, Buchanan, Dickenson, Washington and Wise Counties in southwest Virginia and Mercer County in West Virginia. In addition, the close proximity and mobile nature of individuals and businesses in adjoining counties in Virginia and West Virginia and nearby cities places these markets within our bank's targeted trade area. We also serve individuals and businesses from other areas, including northeastern Tennessee and eastern West Virginia. We offer a range of banking and related financial services focused primarily towards serving individuals, small to medium size businesses, and the professional community. We strive to serve the banking needs of our customers while developing personal, hometown relationships with them. Our board of directors believes that marketing customized banking services will enable us to establish a niche in the financial services marketplace in our market. We provide professionals and small and medium size businesses in our market area with responsive and technologically advanced banking services. These services include loans that are priced on a deposit relationship basis, easy access to our decision makers, and quick and innovative action necessary to meet a customer's banking needs. Our capitalization and lending limit enables us to satisfy the credit needs of a large portion of the targeted market segment. When a customer needs a loan that exceeds our lending limit, we try to find other financial institutions to participate in the loan with us. Our History The bank was incorporated under the laws of the Commonwealth of Virginia on December 9, 1997 and began operations on October 28, 1998. On September 27, 2001, the shareholders of the bank approved a plan of reorganization under which they exchanged their shares of bank common stock for shares of our common stock. On November 30, 2001, the reorganization was completed and the bank became our wholly owned subsidiary. The bank is our only subsidiary. The formation of the bank was first discussed by a group of citizens who responded to their community's yearning for the friendly hometown banking provided for years by Peoples Bank, which also originated in Russell County. Peoples Bank served their community as an independent community bank from its formation in 1970 until 1987 and as part of the Premier Bank family from its acquisition by Premier Bankshares Corporation in 1987 until 1997. First Virginia Banks, Inc. acquired Premier and all of its banking subsidiaries in 1997. Although Peoples Bank and New Peoples Bank have no formal or legal connection, several of the officers, board members and employees who made Peoples Bank a success formed the nucleus for New Peoples Bank. This core Russell County group invited residents of Scott County, Buchanan County and Dickenson County to promote the idea of organizing southwest Virginia's first community bank in almost two decades. The community response was overwhelming and over 2,400 shareholders emerged to raise in excess of $11 million dollars in start-up capital within a 90-day sale period. The Commonwealth of Virginia authorized the bank to open three banks at once, including the central headquarters in Honaker, Virginia, and branches in Weber City and Castlewood, Virginia. Loan production offices were opened in Norton, Clintwood and Claypool Hill, Virginia. 15 Location and Market Area We initially opened with full service branches in Honaker and Weber City, Virginia and in 1999 opened a full service branch in Castlewood, Virginia. During 2000, we opened full service branches in Haysi and Lebanon, Virginia. During 2001, we opened branches in Pounding Mill, Virginia and Princeton, West Virginia. In 2002, we have opened branch offices in Gate City and Clintwood, Virginia. We also have loan production offices located in Norton and Abingdon, Virginia. Management will continue to investigate and consider other possible sites that would enable us to profitably serve our chosen market area. In order to open any additional banking offices, we must obtain prior regulatory approval, which takes into account a number of factors, including, among others, a determination that we have capital in an amount deemed necessary to warrant additional expansion and a finding that the public interest will be served. While we plan to seek regulatory approval at the appropriate time to establish additional banking offices, there can be no assurance when or if we will be able to undertake such expansion plans. Internet Site In March 2001, we opened our internet banking site at www.newpeoplesbank.com. The site includes a customer service area that contains branch and ATM locations, product descriptions and current interest rates offered on deposit accounts. Customers with internet access can access account balances, make transfers between accounts, enter stop payment orders, order checks, and use an optional bill paying service. New customers who live within a limited market area can open accounts on line. Banking Services General. We accept deposits, makes consumer and commercial loans, issues drafts, and provide other services customarily offered by a commercial bank, such as business and personal checking and savings accounts, walk-up tellers, drive-in windows, and 24-hour automated teller machines. New Peoples Bank is a member of the Federal Reserve System and its deposits are insured under the Federal Deposit Insurance Act to the limits provider thereunder. We offer a full range of short-to-medium term commercial and personal loans. Commercial loans include both secured and unsecured loans for working capital (including inventory and receivables), business expansion (including acquisition of real estate and improvements) and purchase of equipment and machinery. Consumer loans may include secured and unsecured loans for financing automobiles, home improvements, education and personal investments. Our lending activities are subject to a variety of lending limits imposed by state law. While differing limits apply in certain circumstances based on the type of loan or the nature of the borrower (including the borrower's relationship to the bank), in general New Peoples Bank is subject to a loan-to-one borrower limit of an amount equal to 15% of its capital and surplus in the case of loans which are not fully secured by readily marketable or other permissible types of collateral. The bank voluntarily may choose to impose a policy limit on loans to a single borrower that is less than the legal lending limit. Commercial Loans. We make commercial loans to qualified businesses in our market area. Our commercial lending consists primarily of commercial and industrial loans to finance accounts receivable, inventory, property, plant and equipment. Commercial business loans generally have a higher degree of risk than residential mortgage loans, but have commensurately higher yields. Residential mortgage loans generally are made on the basis of the borrower's ability to make repayment from his employment and other income and are secured by real estate whose value tends to be easily ascertainable. In contrast, 16 commercial business loans typically are made on the basis of the borrower's ability to make repayment from cash flow from its business and are secured by business assets, such as commercial real estate, accounts receivable, equipment and inventory.deems relevant. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself. Further, the collateral for commercial business loans may depreciate over time and cannot be appraised with as much precision as residential real estate. To manage these risks, our policy is to secure commercial loans with both the assets of the borrowing business and other additional collateral and guarantees that may be available. In addition, we actively monitor certain measures of the borrower, including advance rate, cash flow, collateral value and other appropriate credit factors. Residential Mortgage Loans. Our residential mortgage loans consist of residential first and second mortgage loans, residential construction loans and home equity lines of credit and term loans secured by first and second mortgages on the residences of borrowers for home improvements, education and other personal expenditures. We make mortgage loans with a variety of terms, including fixed and floating or variable rates and a variety of maturities. Maturities for construction loans generally range from 4-12 to months for residential property and from 6 to 18 months for non-residential and multi-family properties. Residential mortgage loans generally are made on the basis of the borrower's ability to make repayment from his employment and other income and are secured by real estate whose value tends to be easily ascertainable. These loans are made consistent with the appraisal policies and real estate lending policies, which detail maximum loan-to-value ratios and maturities. Loans for owner-occupied property are generally made with a loan-to-value ratio of up to 80% for first liens. Higher loan-to-value ratios are allowed based on the borrower's unusually strong general liquidity, net worth and cash flow. Loan-to-value ratios for home equity lines of credit generally do not exceed 90%. If the loan-to-value ratio exceeds 80% for residential mortgage loans, the bank obtains appropriate credit enhancement in the form of either mortgage insurance or readily marketable collateral. Construction Loans. Construction lending entails significant additional risks, compared to residential mortgage lending. Construction loans often involve larger loan balances concentrated with single borrowers or groups of related borrowers. Construction loans also involve additional risks attributable to the fact that loan funds are advanced upon the security of property under construction, which is of uncertain value prior to the completion of construction. Thus, it is more difficult to evaluate accurately the total loan funds required to complete a project and related loan-to-value ratios. To minimize the risks associated with construction lending, the bank limits loan-to-value ratios for residential property to 85% and for non-residential property and multi-family properties to 80%, in addition to its usual credit analysis of its borrowers. Management feels that the loan-to-value ratios described above are sufficient to compensate for fluctuations in the real estate market to minimize the risk of loss. Consumer Loans. Our consumer loans consist primarily of installment loans to individuals for personal, family and household purposes. The specific types of consumer loans that we make include home improvement loans, debt consolidation loans and general consumer lending. Consumer loans entail greater risk than residential mortgage loans do, particularly in the case of consumer loans that are unsecured, such as lines of credit, or secured by rapidly depreciable assets such as automobiles. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. The remaining deficiency often does not warrant further substantial collection efforts against the borrower. In addition, consumer loan collections are dependent on the borrower's continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and 17 state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. Such loans may also give rise to claims and defenses by a consumer loan borrower against an assignee of such loan such as the bank, and a borrower may be able to assert against such assignee claims and defenses that it has against the seller of the underlying collateral. Our policy for consumer loans is to accept moderate risk while minimizing losses, primarily through a careful analysis of the borrower. In evaluating consumer loans, we require our lending officers to review the borrower's level and stability of income, past credit history and the impact of these factors on the ability of the borrower to repay the loan in a timely manner. In addition, we maintain an appropriate margin between the loan amount and collateral value. Other Bank Services. Other bank services include safe deposit boxes, cashier's checks, certain cash management services, traveler's checks, direct deposit of payroll and social security checks and automatic drafts for various accounts. We offer ATM card services that can be used by our customers throughout Virginia and other regions. We also offer MasterCard and VISA credit card services through an intermediary. We do not anticipate ~~exercising trust powers in the next few years. We may establish~~paying a trust department in the future but cannot do so without the prior approval of the Virginia State Corporation Commission's Bureau of Financial Institutions. In the interim, we may contract for trust services to our customers through outside vendors. Competition The banking business is highly competitive. We compete as a financial intermediary with other commercial banks, savings and loan associations, credit unions, mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds and other financial institutions operating in the Southwest Virginia market area and elsewhere. Our market area is a highly competitive, highly branched banking market. Competition in the market area for loans to small businesses and professionals, the bank's target market, is intense, and pricing is important. Most of our competitors have substantially greater resources and lending limits than we have. They offer certain services, such as extensive and established branch networks and trust services, that we do not expect to provide or will not provide in the near future. Moreover, larger institutions operating in the Southwestern Virginia market area have access to borrowed funds at lower cost than are available to us. Deposit competition among institutions in the market area also is strong. As a result, it is possible that we may pay above-market rates to attract deposits. According to a market share report prepared by the FDIC, as of June 30, 2001, the most recent date for which market share information is available, New Peoples Bank's deposits as a percentage of total deposits in its major market areas were as follows: Russell County - 39.0 %, Scott County - 24.8% and Dickenson County - 9.3%. Employees As of December 31, 2001, we had 111 total employees, 108 of which were full-time employees. None of our employees is covered by any collective bargaining agreement, and relations with employees are considered excellent. 18 Legal Proceedings In the course of our operations, we may become a party to legal proceedings. We are not aware of any material pending or threatened litigation. Properties We own our main office and all of our branch offices. We conduct our business from the following locations: Main Office o 2 Gent Drive, Honaker, Virginia 24260 (opened 1998) Branch Offices o 131 U.S. Highway 28 South, Weber City, Virginia 24290 (opened 1998) o 102 Miners Drive, Castlewood, Virginia 24224 (opened 1999) o 402 Main Street, Haysi, Virginia 24256 (opened 2000) o 685 North East Main Street, Lebanon, Virginia 24266 (opened 2000) o Route 460 at Pounding Mill, Virginia 24637 (opened 2001) o 1221 Stafford Drive, Princeton, West Virginia 24740 (opened 2001) o 326 East Jackson Street, Gate City, Virginia 24251 (opened 2002) o Route 83, Colley Shopping Center, Clintwood, Virginia 24228 (opened 2002) We have loan production offices in Norton and Abingdon, Virginia. We lease these offices through operating lease arrangements with varying term lengths. We have purchased property that includes a former bank building in Big Stone Gap. We anticipate that this branch office will open in August 2002 after remodeling is complete. We have also purchased property that includes a former bank building in Tazewell, Virginia. The purchase of the property, however, included a one-year prohibitiondividend on banking activities. We anticipate that this branch office will open in the fall of 2002 after the prohibition expires and remodeling is complete. We believe that all of our properties are maintained in good operating condition and are suitable and adequate for our operational needs. 19 SELECTED HISTORICAL FINANCIAL INFORMATION The following consolidated summary sets forth selected financial data for us for the periods and at the dates indicated. The following summary is qualified in its entirety by the detailed information and the financial statements included elsewhere in this prospectus.

~~(1) We have adjusted all share amounts and per share data to reflect a two-for-one stock split of~~ our common stock in ~~January 2002. (2) Net interest margin is calculated as tax-equivalent net interest income divided by average earning assets~~2012 or 2013.SeeNote 3, Note 16 and ~~represents our net yield on our earning assets. 20~~ ~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The following commentary discusses major components~~Note 23 of ~~our business and presents an overview of our consolidated financial position at March 31, 2002 and at~~the Notes to the Consolidated Financial Statements included in the December 31, ~~2001~~2011 Form 10-K incorporated by reference for further discussion of dividend limitations and 2000 as well as results of operations for the quarters ended March 31, 2002 and 2001 and the years ended December 31, 2001 and 2000. This discussion should be reviewed in conjunction with the consolidated financial statements and accompanying notes and other statistical information presented elsewhere in this prospectus. We are not aware of any current recommendations by any regulatory authorities that, if they were implemented, would have a material effect on our liquidity, capital resources or results of operations. Overview On September 27, 2001, New Peoples Bank's shareholders approved a plan of reorganization under which they exchanged their common stock for our common stock. On November 30, 2001, the reorganization was completed and New Peoples Bank became our wholly owned subsidiary. The accompanying financial information reflects the financial condition and operations of New Peoples Bank prior to November 30, 2001 and our consolidated financial condition and operations since then. Since opening for business on October 28, 1998, we have achieved outstanding growth. At March 31, 2002, our total assets were $226.4 million, total deposits were $205.3 million and total loans were $189.8 million. Our net income for the three months ended March 31, 2002 was $579,000, compared to net income of $190,000 for the three months ended March 31, 2001. Net income per share was $.10 in the quarter ended March 31, 2002, compared to $.03 for the same period last year. Our net income for the year 2001 was $1.0 million, compared to $761,000 for 2000. Net income per share was $.17 for 2001, compared to $.14 for 2000. For the foreseeable future, our management will continue its strategy of providing personal and customized financial services to individuals, small to medium size businesses and the professional community. We will strive to serve the banking needs of our customers by developing personal, hometown relationships. 21 Net Interest Income 2001 Compared with 2000 Our net interest margin in 2001 was 4.31%, compared to 3.99% for 2000. The rates received on earning assets decreased less than the rates paid on deposits, resulting in the increase in net interest margin. During 2001, interest rates fell in response to interest rate reductions by the Federal Reserve. However, we were able to maintain an average yield on loans of 9.37% for 2001, compared to 9.52% for 2000 due to the strong demand for loans that we experienced from our customers. The average yield on federal funds sold decreased from 6.22% in 2000 to 4.15% in 2001 as a result of the interest rate reductions. We were able to improve the yield on investments from 5.78% in 2000 to 6.15% in 2001 by purchasing U.S. Government Agency bonds with longer maturities. Consistent with market interest rate reductions, the average cost of deposits decreased from 5.91% for 2000 to 5.18% for 2001. 2000 Compared with 1999 Our net interest margin on earnings assets for 2000 was 3.99%, compared to 3.78% for 1999. The rates on earning assets increased more than the rates paid on deposits, resulting in the increase in net interest margin. In response to strong loan demand, the average balance of loans increased $54.5 million and the average rate received on loans increased from 8.88% for 1999 to 9.52% for 2000. The interest rates received on loans, federal funds sold and other investments increased in response to a general increase in market interest rates. Consistent with market rate increases, the average cost of deposits increased from 5.18% for 1999 to 5.91% for 2000. 22 The following table shows the rates paid on earning assets and deposit liabilities for the periods indicated. Net Interest Margin Analysis Average Balance Sheet For the Years Ended December 31, (dollars in thousands)

23 ~~Net interest income is affected by changes in both average interest rates and the average volumes of interest-earning assets and interest-bearing liabilities.~~ requirements.

The following table sets forth the ~~amounts~~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 ~~total changes~~Minimum Offering Amount (6,666,667 shares) and (ii) the sale of the Maximum Offering Amount (16,666,667 shares), in ~~interest income~~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.

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 ~~expense which can be attributed to rate (change in rate multiplied by old volume) and volume (change in volume multiplied by old rate)~~a public offering. Except for the ~~periods indicated.~~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 ~~change~~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 ~~interest~~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.

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 ~~both volume~~the economic downturn and ~~rate~~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 ~~been allocated~~chosen to ~~volume~~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 ~~rate~~the issuance of the Conversion Shares.

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.

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 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 ~~relationship of the absolute dollar amounts of the change in each. Volume and Rate Analysis (in thousands)~~

First Quarter 2002 Compared with First Quarter 2001 Our interest margin was 4.86% for the quarter ended March 31, 2002 and 3.88% for the first three months of 2001. Interest rates were lower during the first three months of 2002 compared to the same period in 2001, due to interest rate cuts by the Federal Reserve. The average yield on earning assets decreased 114 basis points and the average cost of funds decreased 262 basis points, resulting in the increase in the net interest margin. Because of a strong loan demand, we were able to maintain a yield on loans of 8.46% during the current period, compared to 9.61% for the prior period. We continue to offer attractive loan and deposit rates in order to attract new customers. 24 The following table shows the rates paid on earnings assets and deposit liabilities for the periods indicated. Net Interest Margin Analysis Average Balance Sheet For the Three Months Ended March 31, (dollars in thousands)

25 Interest Sensitivity At March 31, 2002, we had a negative cumulative gap rate sensitivity ratio of 28.73% for the one year repricing period, compared to 33.00% at December 31, 2001. This generally indicates that earnings would improve in a declining interest rate environment as liabilities reprice more quickly than assets. Conversely, earnings would probably decrease in periods during which interest rates are increasing. On a quarterly basis, management reviews our interest rate risk and has decided that the current position is an acceptable risk for a growing community bank operating in a rural environment. The table set forth below shows our interest sensitivity by year. Interest Sensitivity Analysis December 31, 2001 (dollars in thousands)

26 ~~Interest Sensitivity Analysis March 31, 2002 (dollars in thousands)~~

The above tables reflect the earlier of the maturity or repricing dates for various assets and liabilities. In preparing the above tables, no assumptions are made with respect to loan prepayments or deposit run offs. Loan principal payments are included in the earliest period in which the loan matures or can be repriced. Principal payments on installment loans scheduled prior to maturity are included in the period of maturity or repricing. Provision for Loan Losses 2001 Compared with 2000 The provision for loan losses was $571,000 for 2001 compared with $513,000 for 2000. The allowance for loan losses was $1.8 million at December 31, 2001 (approximately 1% of total loans outstanding). Net loans charged off for 2001 were $89,000 (.06% of average loans), compared to $67,000 for 2000. Net loans charged off as a percentage of average loans may increase as our loan portfolio matures. 2000 Compared with 1999 The provision for loan losses was $513,000 for 2000 compared with $867,000 for 1999. The allowance for loan losses was approximately 1% of loans at the end of each year. Net loans charged off for 2000 were $67,000 (.06% of average loans), compared to $1,000 for 1999. 27 First Quarter 2002 Compared with First Quarter 2001 The provision for loan losses for the first three months of 2002 was $130,000, compared to $159,000 for the same period of 2001. Loan charge-offs for the first three months of 2002 were $48,000 and recoveries were $23,000 resulting in an allowance for loan losses of $1.9 million (approximately 1% of total loans). The calculation of the allowance for loan losses is considered a critical accounting policy. For each period presented, the provision for loan losses charged to operations is based on management's judgment after taking into consideration all factors connected with the collectibility of the existing portfolio. Management evaluates the loan portfolio in light of economic conditions, changes in the nature and volume of the portfolio, industry historical experience, adverse situations that may affect the borrowers ability to repay and other relevant factors. Specific factors considered by management in determining the amounts charged to operations include internally generated loan review reports and past due reports. This review also considers concentrations of loans in terms of geography, business type or level of risk. Management evaluates nonperforming loans relative to their collateral value and makes appropriate adjustments to the allowance for loan losses when needed. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Since we are relatively new and the loan portfolio is not mature, we use industry historical loss percentages that regulatory authorities recommend when calculating the allowance (a minimum of one percent of year end losses). As the loan portfolio matures, a loss rate specific to us will emerge and these loss percentages will be applied to the loan portfolio. This will result in a more accurate allowance for loan loss calculation that is tailored to reflect the risk associated with our loan portfolio. The following table provides a summary of the activity in the allowance for loan losses. Analysis of the Allowance for Loan Losses (dollars in thousands)

28 We have allocated the allowance according to the amount deemed to be reasonably necessary to provide for the possibility of losses being incurred within each of the categories of loans. The allocation of the allowance as shown in the following table should not be interpreted as an indication that loan losses in future years will occur in the same proportions or that the allocation indicates future loan loss trends. Furthermore, the portion allocated to each loan category is not the total amount available for future losses that might occur within such categories since the total allowance is a general allowance applicable to the entire portfolio. The following table shows the balance and percentage of our allowance for loan losses allocated to each major category of loans. Allocation of the Allowance for Loan Losses (dollars in thousands)

The allocation of the allowance for loan losses at March 31, 2002 would not differ significantly from the allocation at December 31, 2001. The allowance for loan losses was not allocated at December 31, 1998. Nonaccrual loans and loans past due 90 days or more and still accruing are shown in the following schedule. Loans past due 90 days or more are classified as nonaccrual unless the loan is well secured and in the process of collection. Nonaccrual loans did not have a significant impact on interest income in any of the periods presented. Management has not identified any additional loans as "troubled debt restructurings" or "potential problem loans." Non-Accrual and Past Due Loans (dollars in thousands)

29 Noninterest Income 2001 Compared with 2000 Noninterest income increased from $444,000 in 2000 to $753,000 in 2001. The increase is consistent with the growth in our average assets. The major sources of noninterest income include overdraft fees on deposit accounts and insurance commissions. The overdraft fees increased from $324,000 for 2000 to $458,000 for 2001. Insurance commissions increased from $54,000 for 2000 to $108,000 for 2001. Noninterest income as a percentage of average assets increased from .34% in 2000 to .40% in 2001. 2000 Compared with 1999 Noninterest income increased from $243,000 in 1999 to $444,000 in 2000. The increase is consistent with the growth in our average assets and operations. Noninterest income as a percentage of average assets was .34% for both years. First Quarter 2002 Compared with First Quarter 2001 Noninterest income increased from $128,000 in the first three months of 2001 to $299,000 in the first three months of 2002. Part of the increase is due to income of $105,000 on the life insurance agreements entered into in December of 2001. The remaining increase in service charges, fees and commissions is consistent with the growth in our average assets. Noninterest income as a percentage (annualized) of average assets increased from .31% for the first quarter of 2001 to .54% for the first three months of 2002. Noninterest Expense 2001 Compared with 2000 Noninterest expense increased from $3.7 million in 2000 to $5.9 million in 2001. The increase was due to additional staffing and expenses associated with the new branches opened and the general growth in operations. Noninterest expense as a percentage of average assets increased from 2.82% in 2000 to 3.15% for 2001. Noninterest expense in the future will depend on our growth and the number of new branch locations. 2000 Compared with 1999 Noninterest expense increased from $2.6 million in 1999 to $3.7 million in 2000. The increase was due to additional staffing and expenses associated with the new branches opened and the general growth in operations. Noninterest expense as a percentage of average assets decreased from 3.66% for 1999 to 2.82% for 2000. First Quarter 2002 Compared with First Quarter 2001 Noninterest expense increased from $1.2 million in the first quarter of 2001 to $1.7 million in the first three months of 2002. The increase was due to additional staffing and expenses associated with the new branches opened and the general growth in operations. Noninterest expenses as a percentage (annualized) of average assets increased from 2.87% for the first three months of 2001 to 3.06% for the first three months of 2002. 30 Income Taxes Due to timing differences between book and tax treatment of several expense items, a deferred tax asset of $212,000 has been recognized at December 31, 2001. The deferred tax asset represents reductions in future income tax liabilities from future deductions for start-up costs, bad debts and capitalized interest costs. Our income tax expense was computed at the normal corporate income tax rate of 34% of taxable income included in net income. We do not have significant nontaxable income or nondeductible expenses. Loans We have had a continued strong loan demand and total loans increased $44.5 million during 2000, $48.1 million during 2001 and $10.5 million during the first quarter of 2002. A schedule of loans by type is set forth immediately below. Approximately 57% of the loan portfolio is secured by real estate. Loans receivable outstanding are summarized as follows: Loan Portfolio (in thousands)

31 Our loan maturities as of December 31, 2001 are shown in the following table. Our loan maturities at March 31, 2002 were not significantly different than the maturities at December 31, 2001. Maturities of Loans (in thousands)

This table reflects the earlier of the maturity or repricing dates for various assets and liabilities at December 31, 2001. In preparing this table, no assumptions are made with respect to loan prepayments or deposit run offs. Loan principal payments are included in the earliest period in which the loan matures or can be repriced. Principal payments on installment loans scheduled prior to maturity are included in the period of maturity or repricing. 32 Investment Securities Total investment securities decreased from $11.9 million at December 31, 2000 to $5.7 million at December 31, 2001 and increased to $8.2 million at March 31, 2002. We had no available for sale securities at December 31, 2001 and March 31, 2002. At those dates, we believed that we had adequate liquidity in the form of other assets, including federal funds sold. In addition, the securities held to maturity held at those dates generally had short contractual maturities and would have been available for liquidity purposes if necessary. At December 31, 2001, we had short term U.S. Government agency notes with a book value of $3.5 million that matured in the first part of January 2002 and we reinvested the proceeds. The carrying values of investment securities are shown in the following table: Investment Securities Portfolio (in thousands)

33 The amortized cost, fair value and weighted average yield of investment securities at December 31, 2001 and March 31, 2002, by contractual maturity, are shown in the following schedule. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities of Securities (dollars in thousands)

The carrying amount of securities pledged by us to secure public deposits was $2.2 million at December 31, 2001. We are required to hold stock in the Federal Reserve Bank. The investment in Federal Reserve Bank stock is recorded at cost of $529,000 as of March 31, 2002 and December 31, 2001. Life Insurance We have life insurance policies on the lives of four officers with three insurance companies. The total cash surrender value of the policies was $7.6 million and $7.7 million at December 31, 2001 and March 31, 2002, respectively. These policies will yield 6.19%, less a mortality cost of approximately .53% for a net return of approximately 5.66% until the end of 2002. Deposits We have had excellent growth in our deposits which totaled $194.0 million at December 31, 2001 and $205.3 million at March 31, 2002. Time deposits of $100,000 or more equaled approximately 20% of deposits at both December 31, 2001 and March 31, 2002. We do not have brokered deposits and internet accounts are limited to customers located in the surrounding geographical area. The average balance of and the average rate paid on deposits is shown in the net interest margin analysis. A breakdown of deposits by type is shown in our consolidated balance sheet. 34 Maturities of time certificates of deposit of $100,000 or more outstanding are summarized as follows: Maturities of Time Deposits (in thousands)

35 Capital Capital as a percentage of total assets was 8.60% at March 31, 2002 compared to 8.82% at December 31, 2001, and 11.36% at December 31, 2000, which exceeded regulatory requirements. Our required and actual risk based capital ratios at both dates are set forth immediately below. We are considered to be well capitalized under the regulatory framework for prompt corrective action at this time. However, it will be necessary to obtain additional capital in the future to support our rapid growth. Capital Amounts and Ratios (dollars in thousands)

Liquidity We had liquid assets of approximately $11.5 million at December 31, 2001 and $10.4 million at March 31, 2002 in the form of cash, due from banks and federal funds sold. We believe that our liquid assets were adequate at both dates. Additional liquidity will be provided by the growth in deposit accounts and loan repayments. In the event that we need additional funds, we have the ability to purchase federal funds under established lines of credit of $3.5 million. 36 MANAGEMENT The Board of Directors Our board of directors currently consists of 14 members. The board of directors is divided into three classes, two of which consist of five members and one of which consists of four members. These directors serve for the terms of their respective classes, which expire in 2002, 2003 and 2004. The following table sets forth the composition of the board of directors.

The following biographical information discloses each director's age and business experience in the past five years and the year that each individual was first elected to our board of directors or the bank's board of directors. Tim W. Ball, 42, is self-employed as a farmer in Honaker, Virginia. He has been a director since 1999. Joe M. Carter, 64, is General Manager of Daugherty Chevrolet in Clinchport, Virginia. He has been a director since 1998. John D. Cox, 45, is the owner of Tri-County New Holland, a tractor and equipment business, in Kingsport, Tennessee. He has been a director since 1998. Charles H. Gent, Jr., 42, is self-employed in the logging and farming industry in Honaker, Virginia. He has been a director since 1998. Harold Lynn Keene, 47, is President of Keene Carpet, Inc. and Harold Keene Coal Co., Inc. in Honaker, Virginia. He has been a director since 1998. A. Frank Kilgore, 49, is an attorney with Kilgore & Kilgore, P.C. in St. Paul, Virginia. He has been a director since 1998. John D. Maxfield, 59, is retired. He has been a director since 1998. Michael G. McGlothlin, 50, is an attorney with McGlothlin & Wife in Grundy, Virginia. He has been a director since 1998. Fred W. Meade, 68, is President of Big M Discount Stores and West Hills Estates, Inc. in St. Paul, Virginia. He has been a director since 1998. Bill Ed Sample, 68, is self-employed as a farmer in Honaker, Virginia. He has been a director since 1998. 37 E. Virgil Sampson, Jr., 61, is the owner of Scott Jewellers in Gate City, Virginia. He is Chairman of the Board and has been a director since 1998. Steven H. Starnes, 45, is President of Starnes Refrigeration & Air Conditioning, Inc. in Lebanon, Virginia. He has been a director since 1998. Paul R. Vencill, Jr., 60, is the owner of Lebanon Equipment Co. in Lebanon, Virginia. He has been a director since 1998. B. Scott White, 56, is self-employed as a farmer in Castlewood, Virginia. He has been a director since 1998. Executive Officers The following biographical information discloses the age and business experience in the past five years for each of our executive officers Kenneth D. Hart, 55, has served as our President and Chief Executive Officer since 2001 and the bank's President and Chief Executive Officer since 1998. From 1995 to 1998, he was Chief Administrative Officer of First Virginia Bank - Mountain Empire and, from 1975 to 1995, he was Chief Executive Officer of Peoples Bank, Inc. Frank Sexton, Jr., 52, has served as our Executive Vice President, Chief Financial Officer and Secretary since 2001 and the bank's Executive Vice President and Cashier since 1998. From 1991 to 1998, he was Senior Vice President and Cashier of First Virginia Bank - Mountain Empire. Security Ownership of Management The following table sets forth, as of May 31, 2002, certain information with respect to beneficial ownership of shares of our common stock that you and the other subscription rights holders have agreed to purchase by ~~each~~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 ~~members~~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 ~~board~~subscription price that you delivered for those shares of ~~directors,~~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 ~~the executive officer named in the "Summary Compensation Table" below and by all directors and executive officers as a group. Beneficial ownership includes~~your nominee if your shares ~~if any,~~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 ~~spouse, minor children or other relatives~~number of shares issuable upon the exercise of your Over-Subscription Privilege in full at the expiration of the ~~individual living~~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.”

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 ~~person's home,~~Over-Subscription Privileges, and (z) that the beneficial ownership limitation described below is not applicable, the pro rata allocation would be as ~~well~~follows:

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 ~~any, held~~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 ~~another person~~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.

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.”

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.

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:

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.

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

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.

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.

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

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.

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.

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.

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.

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 ~~once~~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.

For U.S. federal income tax purposes, you should not recognize income or ~~at some future time.~~

* Percentageloss upon receipt or exercise of ~~ownership~~these subscription rights to purchase our Shares for the reasons described below in “Certain U.S. Federal Income Tax Consequences.”

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 ~~one percent~~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 ~~outstanding~~risks involved in investing in our common stock.

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 ~~Bank Common Stock. (1) Amounts disclosed include~~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.

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.

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.

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.

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 ~~directors~~that you wish to purchase shares of our common stock at the subscription price.

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 ~~right~~public offering, completing a rights certificate or submitting payment in the public offering, please contact Registrar and Transfer Company.

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

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.

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 ~~options exercisable within 60 days, as follows: Each~~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 ~~14 directors, 2,000 shares; Mr. Hart, 13,000 shares;~~Federal Reserve and ~~Mr. Sexton, 10,000 shares. Although~~Virginia Bureau to complete the ~~exact~~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 ~~has not been determined,~~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.

Our directors, as a group, have collectively subscribed for 666,667 shares in the offering, and we ~~currently~~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 ~~approximately 50,000~~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.

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

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.

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.

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

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.

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:

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.

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.

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.

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.

The subscription agent will hold funds received in payment for shares in ~~this~~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. ~~Security Ownership of Certain Beneficial Owners As of May 31, 2002, there are~~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.

You will have no ~~persons known to us that beneficially own five percent or more~~rights as a holder of the ~~outstanding~~shares you purchase in the offering until certificates representing the shares of our common ~~stock. 39~~ ~~Executive Compensation~~ stock are issued to you, or your account at your nominee is credited with the shares purchased in the offering.

The ~~following table shows, for~~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 ~~fiscal years ended December 31, 2001, 2000 and 1999, the cash compensation that we paid, as well as certain other compensation paid or accrued for~~sale of those ~~years, to the named executive officer in all capacities in which he served: Summary Compensation Table~~

* All benefits that might be considered of a personal nature did not exceed the lesser of $50,000 or 10% of total annual salary and bonus. (1) We have adjusted all share amounts to reflect a two-for-one stock split in January 2002. Stock Options The following table sets forth for the year ended December 31, 2001, the grants of stock options to the named executive officer:

~~(1) We have adjusted all share amounts to reflect a two-for-one stock split in January 2002. We granted stock options at the market value of the~~ shares of common stock atis the ~~grant date. The options are exercisable immediately. (2) Options~~only way for you to liquidate the warrants you acquire in the offering. No fractional warrants will be issued. If you purchase ~~226,000~~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.

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 ~~were granted~~outstanding.

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 ~~during~~have been instructed not to solicit subscriptions for the ~~year ended December 31, 2001. 40~~ ~~The named executive officer did not exercise any~~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 ~~options during 2001. The following table sets forth~~will be conducted within the ~~amount~~requirements of Rule 3a4-1, so as to permit officers, directors and ~~value of stock options that~~employees to participate in the ~~named executive officer held as of December 31, 2001: Fiscal Year End Option Values~~

(1) We have adjusted all share amounts to reflect a two-for-one stock split in January 2002. (2) The value of in-the-money options at fiscal year end was calculated by determining the difference between the fair market value a sharesale of our common ~~stock on December 31, 2001~~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 ~~exercise price~~offering.

The following description is a summary of the ~~options. Transactions with Management Some~~material provisions of our ~~directors~~Restated Articles of Incorporation (the “Articles of Incorporation”), and ~~officers~~Bylaws, as amended (the “Bylaws”). Copies of the Articles of Incorporation and Bylaws have been filed with the SEC and are ~~at present, as in the past,~~incorporated into this prospectus.

As of , 2012, our customers, and we have had, and expect to have in the future, banking transactions in the ordinary course of our business with our directors and officers and their affiliates, on substantially the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with others. These transactions do not involve more than the normal risk of collectibility or present other unfavorable features. There are no legal proceedings to which any of our directors or executive officers, or any of their affiliates, is a party that would be material and adverse to us. DESCRIPTION OF CAPITAL STOCK Our authorized capital stock ~~consists~~consisted of ~~12,000,000~~50,000,000 shares of common stock, par value $2.00 per ~~share. At March 31, 2002, we had 6,000,000~~share, 10,010,178 of which were outstanding. The issued ~~and outstanding~~ shares of common stock ~~held by approximately 3,175 shareholders~~represent non-withdrawable capital, are not accounts of ~~record. Additionally, there~~an insurable type, and are ~~vested options to purchase 256,000 shares~~not federally insured.

Each holder of common ~~stock. All outstanding~~ 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.

Holders of common ~~stock are fully paid and nonassessable. Our articles and bylaws do not authorize the issuance of any class or series of preferred stock. Common Stock Holders of~~ shares ~~of common stock~~ are entitled to receive dividends when and as declared by the board of directors out of funds legally available, ~~therefor.~~ subject to certain restrictions imposed by state and federal laws.

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.

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

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, ~~the~~our assets ~~of ours~~ available for distribution remaining after payment or provision for payment of our debts and liabilities. 41 ~~Holders~~

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

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.

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.

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.

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

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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

(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 onprice 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 ~~matters submitted~~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 ~~shareholders. There~~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 ~~no cumulative~~transactions causing the voting ~~rights~~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. ~~Our shareholders~~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 ~~have preemptive~~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 ~~purchase additional~~the shares acquired in the control share acquisition. These provisions were designed to deter certain takeovers of ~~any class~~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 ~~capital~~ stock. ~~Holders~~

Indemnification of common stock have no conversion or redemption rights. The shares of common stock presently outstanding are, and the common stock to be issued in connection with the offering will be when issued, fully paid and nonassessable. Limitations on Liability of Officers and Directors

As permitted by the Virginia Stock Corporation Act, our ~~articles~~Articles of Incorporation contain provisions that permit us to indemnify our directors ~~and officers~~ 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 ~~the~~ Virginia ~~Act~~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~~non- monetary relief in the event of a breach of a ~~director's or officer's~~director’s fiduciary duty. In addition, these provisions apply only to claims against a director ~~or officer~~ arising out of his or her role as a director ~~or officer~~ and do not relieve a director ~~or officer~~ 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. In addition, our articles provide for the indemnification of both directors and officers for expenses that they incur in connection with the defense or settlement of claims asserted against them in their capacities as directors and officers. This right of indemnification extends to judgments or penalties assessed against them. We have limited our exposure to liability for indemnification of directors and officers by purchasing directors and officers liability insurance coverage.

The rights of indemnification provided in our ~~articles~~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 ~~of 1933, as amended,~~ may be permitted to directors ~~officers~~ or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the ~~Securities and Exchange Commission~~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. ~~GOVERNMENT SUPERVISION AND REGULATION General As~~

The following discussion is a ~~bank holding company, we~~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 ~~regulation~~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:

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

If a partnership (including any entity treated as a partnership for United States federal income tax purposes) receives subscription rights or holds shares ~~or substantially all~~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 ~~assets of any bank or merge or consolidate with another bank holding company without the prior approval of the Federal Reserve. The Bank Holding Company Act also generally limits~~partner and the activities of the partnership. Such a ~~bank holding company~~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.

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 ~~banking, managing or controlling banks, or any other activity which~~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 ~~be so closely related to banking or to managing or controlling banks that an exception is allowed~~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 ~~those activities. As a state-chartered commercial bank,~~ the ~~bank is subject to regulation, supervision and examination by the Virginia State Corporation Commission's Bureau of Financial Institutions. It also is 42~~ ~~subject to regulation, supervision and examination by the Federal Reserve. State and federal law also governs the activities~~taxable year in which you receive the ~~bank engages,~~subscription rights. Such an election is irrevocable.

On the ~~investments that it makes~~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 ~~aggregate~~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 ~~loans~~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 ~~granted~~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.

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 ~~borrower. Various consumer~~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 ~~compliance laws~~(y) the portion of the subscription price allocable to the warrant. The holding period of the share of common stock and ~~regulations also affect~~warrant acquired when you exercise a subscription right will begin on the ~~bank's operations.~~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 ~~earnings~~holding period of the share of common stock acquired upon exercise of the warrant will begin on the day the warrant is exercised.

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.

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 ~~subsidiaries,~~current or accumulated earnings and ~~therefore our earnings, are affected by general economic conditions, management policies, changes in state and~~profits, if any, as determined for United States federal legislation and actions of various regulatory authorities, including those referred to above. The following description summarizes the significant federal and state laws to which we are, and the bank is, subject.income tax purposes. To the extent that ~~statutory or regulatory provisions or proposals are described,~~ the ~~description is qualified in its entirety by reference~~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 ~~particular statutory or regulatory provisions or proposals. Payment~~extent of ~~Dividends We~~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 ~~legal entity separate~~maximum rate of 15%. Similarly, subject to similar exceptions for short-term and ~~distinct from our banking and other subsidiaries. The majority~~hedged positions, distributions on the shares of ~~our revenues result from dividends~~common stock constituting dividend income paid to ~~us by~~U.S. holders that are domestic corporations generally will qualify for the ~~bank.~~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.

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 ~~bank~~deductibility of capital losses is subject to ~~laws~~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 ~~regulations that limit the amount of dividends that it can pay. In addition, we are, and the bank is, subject to various regulatory restrictions relating~~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 including requirements to maintain capital at or above regulatory minimums. Banking regulators have indicated that banking organizations should generally pay dividends only if the organization's net income available toon common ~~shareholders over the past year has been sufficient to fully fund the dividends,~~stock and the ~~prospective rate~~payment of ~~earnings retention appears consistent with~~proceeds from the ~~organization's capital needs, asset quality and overall financial condition. We do not expect that any~~sale, redemption or other disposition of these laws, regulations or policies will materially affect the ability of the bank to pay dividends. Insurance of Accounts, Assessments and Regulation by the FDIC The deposits of the bank are insured by the FDIC up to the limits set forth under applicable law. The deposits of the bank are subject to the deposit insurance assessments of the Bank Insurance Fund of the FDIC. The FDIC has implemented a risk-based deposit insurance assessment system under which the assessment rate for an insured institution may vary according to regulatory capital levels of the institution and other factors (including supervisory evaluations). Depository institutions insured by the Bank Insurance Fund that are "well capitalized" and that present few or no supervisory concerns are required to pay only the statutory minimum assessment of $2,000 annually for deposit insurance, while all other banks are required to pay premiums ranging from .03% to .27% of domestic deposits. These rate schedules are subject to future adjustments by the FDIC. common stock.

In addition, the FDIC has authority to impose special assessments from time to time. However, because the legislation enacted in 1996 requires that both Savings Association Insurance Fund-insured and Bank Insurance Fund-insured deposits pay a pro rata portion of the interest due on the obligations issued by the Financing Corporation, the FDIC is assessing Bank Insurance Fund-insured deposits an additional 1.30 basis points per $100 of deposits to cover those obligations. The FDIC is authorized to prohibit any Bank Insurance Fund-insured institution from engaging in any activity that the FDIC determines by regulation or order to pose a serious threat to the respective insurance fund. Also, the FDIC may initiate enforcement actions against banks, after first giving the institution's primary regulatory authority an opportunity to take such action. The FDIC may terminate the deposit insurance of any depository institution if it determines, after a hearing, that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or any condition imposed in writing by 43 the FDIC. It also may suspend deposit insurance temporarily during the hearing process for the permanent termination of insurance, if the institution has no tangible capital. If deposit insurance is terminated, the deposits at the institution at the time of termination, less subsequent withdrawals, shall continue to be insured for a period from six months to two years, as determined by the FDIC. We are not aware of any existing circumstances that could resultgeneral, payments made in the termination of any bank's deposit insurance. Capital The Federal Reserve has issued risk-based and leverage capital guidelines applicable to banking organizations that it supervises. Under the risk-based capital requirements, we are, and the bank is, generally required to maintain a minimum ratio of total capital to risk-weighted assets (includingUnited States or through certain off-balance sheet activities, such as standby letters of credit) of 8%. At least half of the total capital must be composed of common equity, retained earnings and qualifying perpetual preferred stock, less certain intangibles ("Tier 1 capital"). The remainder may consist of certain subordinated debt, certain hybrid capital instruments and other qualifying preferred stock and a limited amount of the loan loss allowance ("Tier 2 capital," which, together with Tier 1 capital, composes "total capital"). In addition, each of the federal banking regulatory agencies has established minimum leverage capital requirements for banking organizations. Under these requirements, banking organizations must maintain a minimum ratio of Tier 1 capital to adjusted average quarterly assets equal to 3% to 5%, subject to federal bank regulatory evaluation of an organization's overall safety and soundness. The risk-based capital standards of the Federal Reserve explicitly identify concentrations of credit risk and the risk arising from non-traditional activities, as well as an institution's ability to manage these risks, as important factors to be taken into account by the agency in assessing an institution's overall capital adequacy. The capital guidelines also provide that an institution's exposure to a decline in the economic value of its capital due to changes in interest rates be considered by the agency as a factor in evaluating a banking organization's capital adequacy. Other Safety and Soundness Regulations There are a number of obligations and restrictions imposed on bank holding companies and their depository institution subsidiaries by federal law and regulatory policy that are designed to reduce potential loss exposure to the depositors of such depository institutions and to the FDIC insurance funds in the event that the depository institution is insolvent or is in danger of becoming insolvent. For example, under the requirements of the Federal ReserveUnited States related financial intermediaries with respect to ~~bank holding company operations, a bank holding company is~~the ownership and disposition of the shares of common stock will be required to ~~serve~~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 ~~source of~~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.

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.

The consolidated financial strength to its subsidiary depository institutions and to commit resources to support such institutions in circumstances where it might not do so otherwise. In addition, the "cross-guarantee" provisions of federal law require insured depository institutions under common control to reimburse the FDIC for any loss suffered or reasonably anticipated by the FDICstatements as a result of the insolvency of commonly controlled insured depository institutions or for any assistance provided by the FDIC to commonly controlled insured depository institutions in danger of failure. The FDIC may decline to enforce the cross-guarantee provision if it determines that a waiver is in the best interests of the deposit insurance funds. The FDIC's claim for reimbursement under the cross guarantee provisions is superior to claims of shareholders of the insured depository institution or its holding company but is subordinate to claims of depositors, secured creditors and nonaffiliated holders of subordinated debt of the commonly controlled insured depository institutions. The federal banking agencies also have broad powers under current federal law to take prompt corrective action to resolve problems of insured depository institutions. The extent of these powers depends upon whether the institution in question is well capitalized, adequately capitalized, 44 ~~undercapitalized, significantly undercapitalized or critically undercapitalized, as defined by the law. As~~ of December 31, ~~2001,~~2011 and for the ~~bank was classified~~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 ~~well capitalized. State banking regulators also~~of December 31, 2011, have ~~broad enforcement powers over~~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 ~~bank, including~~year ended December 31, 2010 incorporated by reference from our Annual Report on Form 10-K for the ~~power~~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 ~~impose fines and other civil and criminal penalties, and to appoint a conservator. Community Reinvestment The requirements~~stand for re-appointment after completion of the ~~Community Reinvestment Act are also applicable to~~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 bank. The act imposes on financial institutions an affirmative and ongoing obligation to meet the credit needs of their local communities, including low and moderate income neighborhoods, consistent with the safe and sound operation of those institutions. A financial institution's efforts in meeting community needs currently are evaluated as part of the examination process pursuant to twelve assessment factors. These factors are also considered in evaluating mergers, acquisitions and applications to open a branch or facility. To the best knowledge of the bank, it is meeting its obligations under the act. Interstate Banking and Branching Current federal law authorizes interstate acquisitions of banks and bank holding companies without geographic limitation. Effective June 1, 1997, a bank headquartered in one state was authorized to merge with a bank headquartered in another state, as long as neither of the states had opted out of such interstate merger authority prior to such date. After a bank has established branches in a state through an interstate merger transaction, the bank may establish and acquire additional branches at any location in the state where a bank headquartered in that state could have established or acquired branches under applicable federal or state law. Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act was signed into law on November 12,1999. The act covers a broad range of issues, including a repeal of most of the restrictions on affiliations among depository institutions, securities firms and insurance companies. Most of the act's provisions require the federal bank regulatory agencies and other regulatory bodies to adopt regulations to implement the act, and for that reason an assessment of the full impact of the act on us and the bank must await completion of that regulatory process. The act repeals sections 20 and 32 of the Glass-Stegall Act, thus permitting unrestricted affiliations between banks and securities firms. The act also permits bank holding companies to elect to become financial holding companies. A financial holding company may engage in or acquire companies that engage in a broad range of financial services, including securities activities such as underwriting, dealing, brokerage, investment and merchant banking; and insurance underwriting, sales and brokerage activities. In order to become a financial holding company, the bank holding company and all of its affiliated depository institutions must be well-capitalized, well-managed, and have at least a satisfactory Community Reinvestment Act rating. The act provides that the states continue to have the authority to regulate insurance activities, but prohibits the states in most instances from preventing or significantly interfering with the ability of a bank, directly or through an affiliate, to engage insurance sales, solicitations or cross-marketing activities. Although the states generally must regulate bank insurance activities in a nondiscriminatory manner, the states may continue to adopt and enforce rules that specifically regulate bank insurance activities in certain areas identified in the act. The act directs the federal bank regulatory agencies to adopt insurance consumer protection regulations that apply to sales practices, solicitations, advertising and disclosures. 45 The act adopts a system of functional regulation under which the Federal Reserve is confirmed as the umbrella regulator for financial holding companies, but financial holding company affiliates are to be principally regulated by functional regulators such as the FDIC for state nonmember bank affiliates, the Securities and Exchange Commission for securities affiliates and state insurance regulators for insurance affiliates. The act repeals the broad exemption of banks from the definitions of "broker" and "dealer" for purposes of the Securities and Exchange Act of 1934, as amended, but identifies a set of specific activities, including traditional bank trust and fiduciary activities, in which a bank may engage without being deemed a "broker," and a set of activities in which a bank may engage without being deemed a "dealer." The act also makes conforming changes in the definitions of "broker" and "dealer" for purposes of the Investment Company Act of 1940, as amended, and the Investment Advisers Act of 1940, as amended. The act contains extensive customer privacy protection provisions. Under these provisions, a financial institution must provide to its customers, at the inception of the customer relationship and annually thereafter, the institution's policies and procedures regarding the handling of customers' nonpublic personal financial information. The act provides that, except for certain limited exceptions, an institution may not provide such personal information to unaffiliated third parties unless the institution discloses to the customer that such information may be so provided and the customer is given the opportunity to opt out of such disclosure. An institution may not disclose to a non-affiliated third party, other than to a consumer reporting agency, customer account numbers or other similar account identifiers for marketing purposes. The act also provides that the states may adopt customer privacy protections that are more strict than those contained in the act. The act also makes a criminal offense, except in limited circumstances, obtaining or attempting to obtain customer information of a financial nature by fraudulent or deceptive means. year ending December 31, 2011.

The validity of the shares of our common stock offered and certain ~~other~~ legal matters will be passed upon for New Peoples Bankshares, Inc. by the law firm of Williams Mullen. EXPERTS The consolidated financial statements included in this prospectus and the registration statement have been audited by S.B. Hoover & Company, L.L.P., independent certified public accountants, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. CAUTION ABOUT FORWARD LOOKING STATEMENTS We make forward looking statements in this prospectus that are subject to risks and uncertainties. These forward looking statements include statements regarding profitability, liquidity, allowance for loan losses, interest rate sensitivity, market risk, and financial and other goals. The words "believes," "expects," "may," "will," "should," "projects," "contemplates," "anticipates," "forecasts," "intends" or other similar words or terms are intended to identify forward looking statements. 46 These forward looking statements are subject to significant uncertainties because they are based upon or are affected by factors including: o Continued levels of loan quality and origination volume; o Interest rate fluctuations and other economic conditions; o Competition in product offerings and product pricing; o Continued relationships with major customers; o Future laws and regulations; and o Other factors, including those matters discussed in the "Risk Factors" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of this prospectus. Because of these uncertainties, our actual future results may be materially different from the results indicated by these forward looking statements. In addition, our past results of operations do not necessarily indicate our future results. LeClairRyan, a Professional Corporation.

We ~~are subject to the information requirements of the Securities Exchange Act of 1934, as amended, and we~~ file annual, quarterly, ~~and~~ current reports, proxy statements and other information with the ~~Securities~~SEC. Our SEC filings are filed electronically and ~~Exchange Commission. You may~~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 ~~copy any document that we file~~copied at the ~~SEC's public reference room facility located~~SEC’s Public Reference Room at ~~450 Fifth~~100 F Street, ~~NW,~~N.E., Washington, D.C. 20549. ~~Please call~~The public may obtain information on the operation of the Public Reference Room by calling the SEC at ~~1-800-SEC-0330 for further information~~1-800-SEC-0330. We also provide a link to our filings on the ~~public reference room. The~~ SEC ~~also maintains an~~website, free of charge, through our Internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers, including us, that file documents with the SEC electronically through the SEC's electronic data gathering, analysis and retrieval system known as EDGAR. website www.npbankshares.com under “Investor Relations.”

This prospectus is part of a registration statement on Form S-1 filed by us with the SEC. Because the rules and regulations of the SEC allow us to omit certain portions of the registration statement from this prospectus, this prospectus does not contain all the information set forth in the registration statement. 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. The registration statement~~prospectus and ~~its exhibits may be inspected~~the related warrants at the ~~public reference facility~~Public Reference Room of the SEC at the locations described above.

We ~~also maintain an Internet site at www.newpeoplesbank.com, which contains~~are “incorporating by reference” in this prospectus information ~~relating to us and our business. 47~~ INDEX TO FINANCIAL STATEMENTS Annual Financial Statements Page Independent Auditors' Report F2 Consolidated Balance Sheets as of December 31, 2001 and 2000 F3 Consolidated Statements of Income - Years Ended December 31, 2001, 2000 and 1999 F4 Consolidated Statements of Stockholders' Equity - Years Ended December 31, 2001, 2000 and 1999 F5 Consolidated Statements of Cash Flows - Years Ended December 31, 2001, 2000 and 1999 F6 Notes to Consolidated Financial Statements F7 Quarterly Financial Statements Consolidated Balance Sheets - March 31, 2002 and December 31, 2001 F22 Consolidated Statements of Income - Three Months Ended March 31, 2002 and 2001 F23 Consolidated Statements of Changes in Stockholders' Equity - Three Months Ended March 31, 2002 and 2001 F24 Consolidated Statements of Cash Flows - Three Months Ended March 31, 2002 and 2001 F25 Notes to Consolidated Financial Statements F26 F1 [LETTERHEAD OF S.B. HOOVER & COMPANY, L.L.P.] INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders New Peoples Bankshares, Inc. Honaker, Virginia We have audited the consolidated balance sheets of New Peoples Bankshares, Inc. and subsidiary as of December 31, 2001 and 2000, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we ~~plan and perform~~file with the ~~audits~~SEC, which means that we are disclosing important information to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates madeyou by ~~management, as well as evaluating the overall financial statement presentation. We believe~~referring you to those documents. The information that ~~our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred~~we incorporate by reference is considered to above present fairly, in all material respects, the financial position of New Peoples Bankshares, Inc. and subsidiary as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. /s/ S. B. HOOVER & COMPANY, L.L.P. January 25, 2002 Harrisonburg, Virginia F2 ~~NEW PEOPLES BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2001 AND 2000 ----------------------------~~

~~The accompanying notes are an integral~~be part of this ~~statement. F3~~ NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 ----------------------------------------------------

(1) Earnings per share and average weighted shares of common stock have been restated to reflect the 2 for 1 stock split which occurred on January 1, 2002. The accompanying notes are an integral part of this statement. F4 NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 ----------------------------------------------------

(1) Actual number of shares outstanding prior to January 2002 stock split. The accompanying notes are an integral part of this statement. F5 NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 ----------------------------------------------------

~~The accompanying notes are an integral part of this statement. F6~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NOTE 1 REORGANIZATION: On September 27, 2001, the shareholders of the New Peoples Bank, Inc. ("the Bank") approved a plan of reorganization under which the shareholders of the Bank exchanged their common stock for common stock in New Peoples Bankshares Inc. ("New Peoples"). On November 30, 2001, the reorganization was completed on a pooling of interest basis and the Bank became a wholly owned subsidiary of New Peoples. The accompanying financial statements reflect the transactions of the Bank for the years 2001, 2000 and 1999 and of New Peoples since its inception on July 12, 2001. The revenue and net income for each of the companies from January 1, 2001 until November 30, 2001 is shown in the following schedule: Revenue Net Income New Peoples $ -0- $ (32,749) Bank 14,526,262 1,000,137 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Nature of Operations - New Peoples is a bank holding company whose principal activity is the ownership and management of a community bank. New Peoples subsidiary bank was organized and incorporated under the laws of the Commonwealth of Virginia on December 9, 1997. The Bank commenced operations on October 28, 1998, after receiving regulatory approval. As a state chartered bank, the Bank is subject to regulationsprospectus, unless we update or supersede that information by the Virginia Bureau of Financial Institutions, the Federal Deposit Insurance Corporation and the Federal Reserve Bank. The Bank provides general banking services to individuals, small and medium size businesses and the professional community of southwest Virginia. Consolidation Policy - The consolidated financial statements include New Peoples and the Bank. All significant intercompany balances and transactions have been eliminated. Use of Estimates - The preparation of financial statementsinformation contained in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Investment Securities - Investment securities which the Bank intends to hold until maturity or until called are classified as Held to Maturity. These investment securities are carried at cost, adjusted for amortization of premium and accretion of discounts using the effective interest method. Investment securities, which the Bank intends to hold for indefinite periods of time, are classified as Available for Sale. These investment securities are carried at fair value. At December 31, 2000, the cost of these investments approximated the fair value. Loans and Allowance for Loan Losses - Loans are carried on the balance sheet net of any unearned interest and the allowance for loan losses. Interest income on loans is computed using the effective interest method, except where serious doubt exists as to the collectibility of the loan, in which accrual of the income is discontinued. F7 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Loans and Allowance for Loan Losses (Continued) - The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that collectibility of the principal is unlikely. The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans, industry historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Bank Premises and Equipment - Land, buildings and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life. Advertising Cost - Advertising costs are expensed in the period incurred. Stock Options - New Peoples accounts for stock options using the "intrinsic value method" described in Accounting Principles Board Opinion 25. Income Taxes - Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. Cash and Cash Equivalents - Cash and cash equivalents as used in the cash flow statements includes cash and due from banks and federal funds sold. Earnings Per Share - Earnings per share represent both basic and diluted earnings per share using the treasury stock method. NOTE 3 DEPOSITS IN AND FEDERAL FUNDS SOLD TO BANKS: The Bank had cash on deposit and federal funds sold to other commercial banks amounting to $8,346,191 and $6,084,353 at December 31, 2001 and 2000, respectively. Deposit amounts at other commercial banks may, at times, exceed federally insured limits. F8 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 4 INVESTMENT SECURITIES: The amortized cost and estimated fair value of securities are as follows:

The amortized cost and fair value of investment securities at December 31, 2001, by contractual maturity, are shown in the following schedule. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities Held to Maturity ---------------------------

The carrying amount of securities pledged by the Bank to secure public deposits amounts to $2,159,417 at December 31, 2001. The Bank is required to hold stock in the Federal Reserve Bank. The investment in Federal Reserve Bank stock is recorded at cost of $529,250 as of December 31, 2001 and 2000. F9 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 5 LOANS: Loans receivable outstanding at December 31 are summarized as follows: (Rounded to the nearest thousand.)

~~NOTE 6 ALLOWANCE FOR LOAN LOSSES: A summary of transactions in the allowance for loan losses are as follows:~~

~~NOTE 7 BANK PREMISES AND EQUIPMENT: Bank premises and equipment at December 31, are summarized as follows:~~

~~Depreciation expense for 2001, 2000 and 1999 was $593,997, $373,359, and $278,028, respectively. F10~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 8 OTHER TIME DEPOSITS: The aggregate amount of time deposits with a minimum denomination of $100,000 was $38,847,562 and $28,320,273 at December 31, 2001 and 2000, respectively. At December 31, 2001, the scheduled maturities of certificates of deposit are as follows: 2002 $ 138,753,000 2003 8,016,000 2004 2,462,000 2005 2,108,000 2006 475,000 After five years 217,000 -------------- Total $ 152,031,000 ============== NOTE 9 INCOME TAX EXPENSE: The components of income tax expense for the years ended December 31, are as follows:

~~The deferred tax expense (benefit) resulting from temporary differences for the years ended December 31 is as follows:~~

~~F11~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 9 INCOME TAX EXPENSE (CONTINUED): The net deferred tax assets resulting from temporary differences as of December 31, are summarized as follows:

At December 31, 1999, the Bank had a net operating loss carryforward of $832,666 and contribution carryforward of $7,040, which were used to offset taxable income for 2000. The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rates:

NOTE 10 RELATED PARTY TRANSACTIONS: During the year, officers and directors (and companies controlled by them) were customers of and had transactions with the Company in the normal course of business. These transactions were made on substantially the same terms as those prevailing for other customers and did not involve any abnormal risk. Loan transactions with related parties are shown in the following schedule:

~~F12~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 11 RETIREMENT PLAN: The Bank has established a qualified defined contribution plan which covers all full time employees. Under the plan the Bank matches employee contributions up to a maximum of 5% of their salary. The Bank contributed $109,998, $73,480 and $57,720 to the defined contribution plan for 2001, 2000 and 1999, respectively. NOTE 12 COMMON STOCK: As of December 31, 1999, the Bank had issued and outstanding 1,200,000 shares of $4 par value common stock. On March 15, 2000, the Board approved a 2 for 1 stock split, effected in the form of a dividend, to shareholders of record on that date. This split resulted in an additional 1,200,000 shares of stock oustanding. In addition, the Board approved a post split sale of 600,000 shares of common stock at $10 per share. All of those shares were sold and issued, resulting in a total of 3,000,000 shares issued and outstanding at December 31, 2001. Effective November 30, 2001, the Bank's common stock was exchanged for 3,000,000 shares of New Peoples common stock on a one for one basis. On December 12, 2001, the Board approved a 2 for 1 stock split, to shareholders of record on January 1, 2002 by reducing the par value from $4.00 per share to $2.00 per share. NOTE 13 STOCK OPTION PLAN: New Peoples' stock option plan was adopted on September 27, 2001. The purpose of the Plan is to reward employees and directors for services rendered and investment risks undertaken to date and to promote the success of New Peoples by providing incentives to employees and directors that will promote the identification of their personal interest with the long-term financial success of New Peoples and with growth in shareholder value. The plan provides that options for up to 900,000 shares of New Peoples common stock may be issued to employees and directors. The exercise price may not be less than 100% of the fair market value of the shares on the award date. Each award becomes exercisable in the event of a change in control of New Peoples. All options are subject to exercise or forfeiture if New Peoples' capital falls below its minimum requirements, as determined by its state or federal primary regulators, and New Peoples' primary regulator so directs. The plan will expire on May 31, 2011, unless sooner terminated by the Board of Directors. On December 12, 2001, options to acquire 256,000 shares (on a post stock split basis) were awarded under the plan; these options have an exercise price of $7.50 per share (subsequent to the 2 for 1 stock split on January 1, 2002) and have a term of ten years. The fair value of each option granted was $5.87 using the "Minimum Value" method with the following assumptions: risk free interest rate 5.09%, expected life - 10 years, expected volatility - 0% and expected dividends of zero. F13 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 13 STOCK OPTION PLAN (CONTINUED): New Peoples applies APB Opinion 25 and related interpretations in accounting for the stock option plan. Accordingly, no compensation cost has been recognized. Had compensation cost for New Peoples' stock option plan been determined based on the fair value at the grant dates for awards under the plan consistent with the method prescribed by FASB Statement No. 123, the net income would have been adjusted to the proforma amounts indicated below:

NOTE 14 DEPOSITS WITH LIFE INSURANCE COMPANIES: The Bank has deposited $7,500,000 with various life insurance companies pending the development of a deferred compensation plan which will be funded by the income on the life insurance policies. The life insurance policies will insure key officers and will be owned by New Peoples. The deposit has a guaranteed interest rate of 6.19% through the year 2002. NOTE 15 DIVIDEND LIMITATIONS ON SUBSIDIARY BANK: The principal source of funds of New Peoples is dividends paid by the Bank. The Federal Reserve Act restricts the amount of dividends the Bank may pay. Approval by the Board of Governors of the Federal Reserve Systems is required if the dividends declared by a state member bank, in any year, exceed the sum of (1) net income of the current year and (2) income net of dividends for the preceding two years. In addition, the Federal Reserve Bank has established, for a de novo bank a minimum ratio of tier 1 capital to average assets of 9%. As of January 1, 2002, approximately $931,000 was available for dividend distribution. During 2001, the Bank declared dividend's payable to New Peoples of $25,000. NOTE 16 FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK: In the normal course of business, the Bank has outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making such commitments as it does for instruments that are included in the balance sheet. F14 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 16 FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONTINUED): Financial instruments whose contract amount represents credit risk were as follows (in thousands): 2001 2000 ---- ---- Commitments to extend credit $ 12,134 $ 11,329 Standby letters of credit 2,177 323 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management's credit evaluation. Collateral held varies but may include accounts receivable, inventory, property and equipment, and income-producing commercial properties. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party, Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank's policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. NOTE 17 CONCENTRATION OF CREDIT RISK: The Bank has a concentration of credit risk in deposits and federal funds sold to commercial banks as described in Note 2. Note 4 shows the types of loans made by the Bank. A substantial portion of the Bank's loans are secured by real estate. The Bank does not have any significant concentrations to any one industry or customer. NOTE 18 REGULATORY MATTERS: New Peoples and the Bank are subject to various capital requirements administered by its primary federal regulator, the Federal Reserve Bank. 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 New Peoples' financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the New Peoples must meet specific capital guidelines that involve quantitative measures of the New Peoples' assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The New Peoples' capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors. F15 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 18 REGULATORY MATTERS (CONTINUED): Quantitative measures established by regulation to ensure capital adequacy require New Peoples to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). As of July 30, 2001, the most recent date of notification, the Bureau of Financial Institutions categorized the Bank as 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 and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank's category. The Bank's actual capital amounts (in thousands) and ratios are presented in the table as of December 31, 2001 and 2000, respectively.

~~F16~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 19 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS: Statement of Financial Accounting Standards No. 107 (SFAS 107) "Disclosures About the Fair Value of Financial Statements" defines the fair value of a financial instrument as the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. As the majority of the Bank's financial instruments lack an available trading market, significant estimates, assumptions and present value calculations are required to determine estimated fair value. Estimated fair value and the carrying value of financial instruments at December 31, 2001 and 2000, are as follows (in thousands):

The carrying value of cash and due from banks, federal funds sold, interest-bearing deposits, Federal Reserve Bank stock, deposits with no stated maturities, and accrued interest approximates fair value. The estimated fair value of investment securities was based on closing market prices. The remaining financial instruments were valued based on the present value of estimated future cash flows, discounted at various rates in effect for similar instruments during the month of December 2001 and 2000. F17 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 20 PARENT CORPORATION ONLY FINANCIAL STATEMENTS: BALANCE SHEET AS OF DECEMBER 31, 2001 ----------------------- ASSETS Investment in subsidiary $ 18,895,351 Other assets 3,472 -------------- Total Assets $ 18,898,823 ============== LIABILITIES Due to subsidiary bank $ 7,749 -------------- Total Liabilities $ 7,749 -------------- STOCKHOLDERS' EQUITY Common stock - $ 4.00 par value, 12,000,000 shares authorized; 3,000,000 shares issued and outstanding 12,000,000 Surplus 6,000,000 Retained earnings 891,074 -------------- Total Stockholders' Equity 18,891,074 -------------- Total Liabilities and Stockholders' Equity $ 18,898,823 ============== F18 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 20 PARENT CORPORATION ONLY FINANCIAL STATEMENTS (CONTINUED): STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2001 ------------------------------------ Income Dividends from subsidiary $ 25,000 Income from subsidiary 12,000 -------------- Total Income 37,000 -------------- Expenses Legal fees 32,749 -------------- Total Expenses 32,749 -------------- Income before Income Taxes 4,251 Income Tax Benefit 3,472 -------------- Net Income $ 7,723 ============== F19 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 20 PARENT CORPORATION ONLY FINANCIAL STATEMENTS (CONTINUED): STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2001 --------------------------------------------

~~F20~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) ------------------------------------------------------ NOTE 20 PARENT CORPORATION ONLY FINANCIAL STATEMENTS (CONTINUED): STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2001 ------------------------------------ Operating Activities: Net Income $ 7,723 Adjustments to reconcile net income to net cash provided by operating activities: Income of subsidiary bank (12,000) Net change in: Other assets (3,472) Accounts payable 7,749 -------------- Net Cash Provided by Operating Activities 0 -------------- Net Increase in Cash and Cash Equivalents 0 Cash and Cash Equivalents, Beginning of Year 0 -------------- Cash and Cash Equivalents, End of Year $ 0 ============== Supplemental Information: Non-cash transactions: Transfer of 3,000,000 shares of New Peoples Bankshares stock for 3,000,000 shares of New Peoples Bank stock $ 18,883,351 F21 ~~NEW PEOPLES BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS~~

~~The accompanying notes are an integral part of these statements. F22~~ ~~NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (UNAUDITED)~~

~~(1) Prior year restated to reflect 2 for 1 stock split. The accompanying notes are an integral part of these statements. F23~~ NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (UNAUDITED)

~~The accompanying notes are an integral part of these statements. F24~~ NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (UNAUDITED)

~~The accompanying notes are an integral part of these statements. F25~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 ACCOUNTING PRINCIPLES: The financial statements conform to U.S. generally accepted accounting principles and to general industry practices. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 2002, and the results of operations for the three month periods ended March 31, 2002 and 2001. The notes included herein should be read in conjunction with the notes to financial statements included in the 2001 annual report to stockholders of New Peoples Bankshares, Inc. The Company does not expect the anticipated adoption of any newly issued accounting standards to have a material impact on future operations or financial position. NOTE 2 SECURITIES HELD TO MATURITY: The amortized cost and estimated fair value of held to security securities as of March 31, 2002, are as follows:

~~NOTE 3 LOANS: Loans receivable outstanding are summarized as follows: (Rounded to the nearest thousand.)~~

~~F26~~ NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 ALLOWANCE FOR LOAN LOSSES: Transactions in the Bank's allowance for loan losses are shown in the following schedule:

NOTE 5 COMMON STOCK: On December 12, 2001, the Board of Directors approved a 2 for 1 stock split to shareholders of record on January 1, 2002 by reducing the par value of common stock from $4 to $2 per share. This split resulted in an additional 3,000,000 shares of stock outstanding. NOTE 6 EARNINGS PER SHARE: The weighted average shares outstanding used for the calculation of earnings per share has been adjusted to reflect the 2 for 1 stock split that was effective January 1, 2002. Diluted earnings per share has been calculated for the current quarter to reflect the dilutive effect of the 256,000 exercisable outstanding options granted to employees and directors of the Bank. The dilution calculation assumes that all options were exercised at the beginning of the period and that the proceeds were used to purchase common stock at the average market price during the period. F27 ================================================================================ ________ __, 2002 [LOGO] 1,200,000 Shares of Common Stock ----------------- PROSPECTUS ----------------- - -------------------------------------------------------------------------------- We have not authorized any dealer, salesperson or other person to give you written information other than this prospectus or ~~to make representations as to matters not stated~~the information we file subsequently with the SEC that is incorporated by reference in this prospectus. You ~~must not rely~~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:

We also incorporate by reference into this prospectus ~~nor~~ any ~~sales made hereunder~~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 ~~shall create an implication~~modifies or is contrary to that ~~the information contained herein~~previous statement. Any statement so modified or ~~the affairs~~superseded will not be deemed part of this prospectus except as so modified or superseded.

You may obtain without charge a copy of any of the ~~company have not changed since the date~~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.

The Date of this ~~prospectus. ================================================================================~~ Prospectus is , 2012

Item 13. Other Expenses of Issuance and ~~Distribution. Securities~~Distribution

Set forth below is an estimate of the amount of fees and ~~Exchange Commission Registration Fee......................$1,104* Printing Expenses.........................................................5,000 Accounting Fees~~expenses (other than underwriting discounts and Expenses..............................................5,000 Legal Fees and Expenses..................................................40,000 Blue Sky Fees and Expenses................................................5,000 Miscellaneous Expenses......................................................896 Total...................................................................$57,000 - --------------- * Represents actual expenses. All other expenses are estimates. commissions) to be incurred in connection with the issuance of the shares by New Peoples Bankshares, Inc. (the “Registrant”):

Item 14. Indemnification of Directors and ~~Officers. Article 10 of Chapter 9 of Title 13.1 of~~Officers

The Virginia Stock Corporation Act ( the ~~Code of Virginia (the "Code"~~“Act”) permits a Virginia corporation to indemnify ~~any~~a director or officer ~~for reasonable expenses incurred in any legal~~who is a party to a proceeding ~~in advance of final disposition of the proceeding, if the~~because he is or was a director or officer ~~furnishes~~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 ~~written statement of his or her good faith~~criminal proceeding, he had no reasonable belief that hehis conduct was unlawful. Virginia corporations are not allowed to voluntarily indemnify a director or she has met the standard of conduct prescribed by the Code and furnishes the corporation a written undertaking to repay any advance if it is ultimately determined that he or she did not meet the standard of conduct, and a determination is made by the board of directors that such standard has been met. Inofficer in a proceeding by or in the right of a corporation except for reasonable expenses if it is determined that he met the ~~corporation, no~~standard for indemnification ~~shall be made~~for indemnity or in ~~respect of~~ any ~~matter as to which an officer or director is adjudged to be liable to the corporation, unless the court~~proceeding charging improper personal benefit in which the proceeding took place determines that, despite such liability, such person is reasonably entitled to indemnification in view of all of the relevant circumstances. In any other proceeding, no indemnification shall be made if the director or officer is adjudgedhe was liable ~~to the corporation~~based on ~~the basis that he or she~~ improperly ~~received a~~receiving personal benefit. ~~Corporations are given the power~~The Act permits a corporation to make any other or further indemnity, including advance of expenses, to any director or officer that may be authorized by the articles of incorporation or any bylaw made by the shareholders, or any resolution adopted, before or after the event, by the shareholders, except an indemnity against willful misconduct or a knowing violation of the criminal law. Unless limited by its articles of incorporation, indemnification ofpay a director or ~~officer~~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 ~~when~~indemnification or it is ultimately determined that he ~~or she entirely prevails in~~has not met the ~~defense~~relevant standard of ~~any proceeding to which he or she is a party because he or she is or was a director or officer.~~ conduct.

The Articles of Incorporation of the Registrant contain provisions indemnifying the directors and officers of the Registrant ~~as permitted~~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 ~~Virginia law.~~him. In addition, the Articles of Incorporation ~~of the Registrant~~ eliminate the personal liability of the ~~Registrant's~~Registrant’s directors and officers to the Registrant ~~or its shareholders~~ 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 ~~permitted by Virginia law.~~ directors or officers of the Registrant.

Item 15. Recent Sales of Unregistered Securities. The Registrant has sold unregistered securities within the past three (3) years as follows: The Registrant was formed on July 12, 2001 for the sole purpose of reorganizing New Peoples Bank, Inc. (the "Bank") into a bank holding company structure. In connection with the formation of the Securities

II-1 Registrant, the Registrant made an initial issuance of 100 shares of its common stock ("Common Stock") in August 2001 to the Bank for an aggregate amount of $1,000. The Registrant relied upon Section 4(2) under the Securities Act of 1933, as amended, for the exemption from registration for the issuance of these shares of Common Stock. On November 30, 2001, the Registrant issued 6,000,000 shares of Common Stock to the shareholders of the Bank. The issuance was made in connection with the reorganization of the Bank into a bank holding company structure, and the Registrant exchanged one share of Common Stock for each share of the Bank's common stock. The Registrant relied upon Section 3(a)(12) under the Securities Act of 1933, as amended, for the exemption from registration for the issuance of these shares of Common Stock.

Item 16. Exhibits and Financial Statement Schedules. (a) Exhibits: The following exhibits are filed on behalf of the Registrant as part of this Registration Statement: Exhibit No. Document ----------- -------- 3.1 Articles of Incorporation, attached as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed December 17, 2001, incorporated herein by reference. 3.2 Bylaws, attached as Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed December 17, 2001, incorporated herein by reference. 5.1 Legal opinion of Williams Mullen*. 10.1 2001 Stock Option Plan, attached as Exhibit 10.1 to the Registrant's Annual Report on Form 10-KSB for the period ending December 31, 2001, filed on April 1, 2002, incorporated herein by reference. 21 Subsidiaries of the Registrant*. 23.1 Consent of Williams Mullen (included in Exhibit 5.1 above). 23.2 Consent of S. B. Hoover & Company, L.L.P.*. 24.1 Powers of attorney (included on signature page)*. 99.1 Form of Subscription Agreement*. * Filed herewith. (b) Schedules

Financial Statement Schedules: ~~None.~~ No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial statements or related notes.

(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;~~

(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:

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the ~~Registrant~~registrant pursuant to the foregoing provisions, or otherwise, the ~~Registrant~~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~~registrant of expenses incurred or paid by a director, officer or controlling person of the ~~Registrant~~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~~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 of 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.

Pursuant to the requirements of the Securities Act of 1933, ~~as amended,~~ 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 June 17, 2002. NEW PEOPLES BANKSHARES, INC. By: /s/Kenneth D. Hart ------------------------------------- Kenneth D. Hart President and Chief Executive Officer the 27^th day of March, 2012.

Each person whose signature appears below appoints Jonathan H. Mullins and C. Todd Asbury or either of ~~the undersigned hereby appoints Kenneth D. Hart~~them, as his or her true and ~~Frank Sexton, Jr. as attorneys~~lawful attorney-in-fact and ~~agents~~agent, for ~~the undersigned, with full power of substitution, for~~him or her and in ~~the~~his or her name, place and stead, ~~of the undersigned,~~in any and all capacities, to sign any and ~~file with the Securities~~all amendments (including post-effective amendments) to this Registration Statement and ~~Exchange Commission~~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, ~~any~~and to file the same, with all exhibits thereto, and all ~~amendments and exhibits to the registration statement and any and all applications, instruments and~~ other documents ~~to be filed~~in connection therewith, with the Securities and Exchange Commission, ~~pertaining to the registration of securities covered hereby with~~granting unto said attorney-in-fact and agent full power and authority to do and perform ~~any~~each and every act and thing requisite and necessary to be done, as fully to all ~~acts~~intents and ~~things whatsoever requisite~~purposes as he or ~~desirable.~~ 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, ~~as amended,~~ this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/Kenneth D. Hart President and June 17, 2002 - ------------------------- Chief Executive Officer Kenneth D. Hart (Principal Executive Officer) /s/Frank Sexton, Jr. Executive Vice President, June 17, 2002 - ------------------------- Chief Financial Officer and Secretary Frank Sexton, Jr. (Principal Financial Officer and Principal Accounting Officer) /s/Tim Ball Director June 17, 2002 - ------------------------- Tim Ball /s/Joe M. Carter - ------------------------- Director June 17, 2002 Joe M. Carter /s/John D. Cox Director June 17, 2002 - ------------------------- John D. Cox /s/Charles Gent Director June 17, 2002 - ------------------------- Charles Gent /s/Harold Lynn Keene Director June 17, 2002 - ------------------------- Harold Lynn Keene /s/Frank Kilgore Director June 17, 2002 - ------------------------- Frank Kilgore /s/John Maxfield Director June 17, 2002 - ------------------------- John Maxfield Director June 17, 2002 - ------------------------- Michael G. McGlothlin /s/Fred Meade Director June 17, 2002 - ------------------------- Fred Meade /s/Bill Ed Sample Director June 17, 2002 - ------------------------- Bill Ed Sample /s/E. Virgil Sampson, Jr. Director June 17, 2002 - ------------------------- E. Virgil Sampson, Jr. /s/Steve Starnes Director June 17, 2002 - ------------------------- Steve Starnes /s/Paul Vencill, Jr. Director June 17, 2002 - ------------------------- Paul Vencill, Jr. /s/B. Scott White Director June 17, 2002 - ------------------------- B. Scott White

EXHIBIT INDEX ------------- Exhibit No. Document - ----------- -------- 3.1 Articles of Incorporation, attached as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed December 17, 2001, incorporated herein by reference. 3.2 Bylaws, attached as Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed December 17, 2001, incorporated herein by reference. 5.1 Legal opinion of Williams Mullen*. 10.1 2001 Stock Option Plan, attached as Exhibit 10.1 to the Registrant's Annual Report on Form 10-KSB for the period ending December 31, 2001, filed on April 1, 2002, incorporated herein by reference. 21 Subsidiaries of the Registrant*. 23.1 Consent of Williams Mullen (included in Exhibit 5.1 above). 23.2 Consent of S. B. Hoover & Company, L.L.P.*. 24.1 Powers of attorney (included on signature page)*. 99.1 Form of Subscription Agreement*. * Filed herewith



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


	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


	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	%


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


	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


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


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


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


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		*


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.


NEW PEOPLES BANKSHARES, INC.

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


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)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company