Safe and Sound

PeopleFirst Bank

Joliet, IL
4
Star Rating
PeopleFirst Bank is an FDIC-insured bank started in 2007 and currently based in Joliet, IL. As of June 30, 2017, the bank had equity of $15.5 million on assets of $109.8 million.

Thanks to the work of 25 full-time employees in 2 offices in IL, the bank currently holds loans and leases worth $77.4 million, $71.8 million of which are for real estate. U.S. bank customers currently have $82.1 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, PeopleFirst Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for accountholders during periods of economic trouble for the bank. Therefore, a bank's level of capital is an important measurement of an institution's financial fortitude. When it comes to safety and soundness, the higher the capital, the better.
On our test to measure capital adequacy, PeopleFirst Bank racked up 20 out of a possible 30 points, above the national average of 13.38.

One essential measure of this buffer is a bank's Tier 1 capital ratio. PeopleFirst Bank's Tier 1 capital ratio was 17.55 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, PeopleFirst Bank held equity amounting to 14.11 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with extensive holdings of these types of assets may eventually be required to use capital to cover losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

PeopleFirst Bank fell below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 1.61 percent of PeopleFirst Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on PeopleFirst Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.

PeopleFirst Bank scored 4 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 16.52.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. PeopleFirst Bank's most recent annualized quarterly return on equity was 1.71 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $131,000 on total equity of $15.5 million. The bank had an annualized return on average assets, or ROA, of 0.24 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.