Safe and Sound

PEOPLE'S ALLIANCE

HAUPPAUGE, NY
2
Star Rating
HAUPPAUGE, NY-based PEOPLE'S ALLIANCE is an NCUA-insured credit union founded in 1940. As of June 30, 2017, the credit union had assets of $264.7 million.

Members have $174.6 million on deposit tended by 77 full-time employees. With that footprint, the credit union currently holds loans and leases worth $174.6 million. Its 37,946 members currently have $238.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PEOPLE'S ALLIANCE exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to grade American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is essential. It works as a cushion against losses and as protection for members during times of financial trouble for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, PEOPLE'S ALLIANCE received a score of 4 out of a possible 30 points, below the national average of 15.26.

PEOPLE'S ALLIANCE had a capitalization ratio of 7.00 percent in our test, below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

A credit union with a large number of these types of assets may eventually be forced to use capital to absorb losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, decreasing earnings and increasing the risk of a future failure.

PEOPLE'S ALLIANCE scored 36 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.15.

A higher-than-average ratio of troubled assets of 11.00 percent in our test was something to watch for the credit union.

Earnings score

A credit union's profitability affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand financial shocks. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's test of earnings, PEOPLE'S ALLIANCE scored 4 out of a possible 30, below the national average of 10.31.

PEOPLE'S ALLIANCE had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, suggesting that it's right in line with its peers in this area.

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.