Safe and Sound

The Peoples Bank, Biloxi, Mississippi

Biloxi, MS
3
Star Rating
The Peoples Bank, Biloxi, Mississippi is an FDIC-insured bank started in 1896 and currently based in Biloxi, MS. As of December 31, 2017, the bank had equity of $84.7 million on assets of $647.2 million.

U.S. bank customers have $530.3 million on deposit at 19 offices in MS run by 163 full-time employees. With that footprint, the bank holds loans and leases worth $274.3 million, including $238.7 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, The Peoples Bank, Biloxi, Mississippi exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three key criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for depositors when a bank is experiencing economic instability. Therefore, when it comes to measuring an a bank's financial fortitude, capital is useful. When looking at safety and soundness, the more capital, the better.

The Peoples Bank, Biloxi, Mississippi scored 18 out of a possible 30 points on our test to measure the adequacy of a bank's capital, exceeding the national average of 13.13.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. The Peoples Bank, Biloxi, Mississippi's Tier 1 capital ratio was 22.79 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, The Peoples Bank, Biloxi, Mississippi held equity amounting to 13.09 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

Having a large number of these types of assets means a bank may eventually have to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, reducing earnings and elevating the chances of a future failure.

On Bankrate's asset quality test, The Peoples Bank, Biloxi, Mississippi scored 28 out of a possible 40 points, below the national average of 37.49 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, 4.92 percent of The Peoples Bank, Biloxi, Mississippi's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

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

Earnings score

A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's test of earnings, The Peoples Bank, Biloxi, Mississippi scored 8 out of a possible 30, less than the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for The Peoples Bank, Biloxi, Mississippi was 3.28 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $2.8 million on total equity of $84.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.42 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.