Safe and Sound

First Peoples Bank, Inc.

Mullens, WV
4
Star Rating
Founded in 1926, First Peoples Bank, Inc. is an FDIC-insured bank based in Mullens, WV. Regulatory filings show the bank having equity of $19.6 million on $131.0 million in assets, as of December 31, 2017.

U.S. bank customers have $111.3 million on deposit at 3 offices in WV run by 20 full-time employees. With that footprint, the bank currently holds loans and leases worth $42.6 million, including $36.4 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, First Peoples Bank, Inc. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is crucial. It acts as a cushion against losses and as protection for accountholders during periods of economic trouble for the bank. When it comes to safety and soundness, the more capital, the better.

First Peoples Bank, Inc. achieved a score of 20 out of a possible 30 points on our test to measure capital adequacy, beating out the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. First Peoples Bank, Inc.'s Tier 1 capital ratio was 46.64 percent, exceeding the 6 percent level considered adequate by regulators, and higher than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic difficulties.

Overall, First Peoples Bank, Inc. held equity amounting to 14.99 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these types of assets may eventually be forced to use capital to absorb losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, pushing down earnings and increasing the risk of a future failure.

First Peoples Bank, Inc. did better than the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.25 percent of First Peoples Bank, Inc.'s loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a useful 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 First Peoples Bank, Inc.'s loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, First Peoples Bank, Inc. scored 8 out of a possible 30, failing to reach the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one key measure of a bank's earnings. First Peoples Bank, Inc.'s most recent annualized quarterly return on equity was 3.94 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $775,000 on total equity of $19.6 million. The bank reported an annualized return on average assets, or ROA, of 0.60 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.