Safe and Sound

FIRST PEOPLES COMMUNITY

CUMBERLAND, MD
4
Star Rating
CUMBERLAND, MD-based FIRST PEOPLES COMMUNITY is an NCUA-insured credit union started in 1959. Regulatory filings show the credit union having $401.7 million in assets, as of December 31, 2017.

Thanks to the efforts of 137 full-time employees, the credit union currently holds loans and leases worth $346.3 million. Its 31,945 members currently have $325.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST PEOPLES COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial strength. It works as a buffer against losses and as protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the more capital, the better.

FIRST PEOPLES COMMUNITY did better than the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, scoring 16 out of a possible 30 points.

FIRST PEOPLES COMMUNITY had a capitalization ratio of 16.00 percent in our test, equal to the average for all credit unions, a sign that it's right in line with its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with large numbers of these types of assets may eventually be required 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.

FIRST PEOPLES COMMUNITY scored 32 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.09.

The credit union's ratio of problem assets was 0.00 percent in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic shocks. Losses, on the other hand, diminish a credit union's ability to do those things.

FIRST PEOPLES COMMUNITY scored 14 out of a possible 30 on Bankrate's earnings test, beating the national average of 10.11.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.

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.