Safe and Sound

PEOPLE'S TRUST

Houston, TX
3
Star Rating
Houston, TX-based PEOPLE'S TRUST is an NCUA-insured credit union started in 1935. The credit union has $513.4 million in assets, according to June 30, 2017, regulatory filings.

With 75 full-time employees, the credit union holds loans and leases worth $357.1 million. PEOPLE'S TRUST's 31,983 members currently have $465.2 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PEOPLE'S TRUST exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members when a credit union is experiencing financial trouble. Therefore, when it comes to measuring an an institution's financial strength, capital is valuable. When looking at safety and soundness, the higher the capital, the better.

PEOPLE'S TRUST came in below the national average of 15.26 on our test to measure capital adequacy, scoring 8 out of a possible 30 points.

PEOPLE'S TRUST's capitalization ratio of 9.00 percent in our test was worse than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

A credit union with lots of these types of assets could 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 thus aren't earning money, decreasing earnings and increasing the risk of a failure in the future.

PEOPLE'S TRUST scored above the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The credit union's ratio of problem assets was 4.00 percent in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses diminish a credit union's ability to do those things.

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

PEOPLE'S TRUST had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, a sign that it's running neck and neck 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.