Safe and Sound

PEOPLE'S ALLIANCE

HAUPPAUGE, NY
3
Star Rating
PEOPLE'S ALLIANCE is a HAUPPAUGE, NY-based, NCUA-insured credit union dating back to 1940. Regulatory filings show the credit union having assets of $260.2 million, as of December 31, 2017.

Thanks to the work of 76 full-time employees, the credit union has amassed loans and leases worth $172.2 million. Its 37,572 members currently have $233.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PEOPLE'S ALLIANCE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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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 when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.

PEOPLE'S ALLIANCE finished below the national average of 15.65 on our test to measure capital adequacy, racking up 4 out of a possible 30 points.

PEOPLE'S ALLIANCE's capitalization ratio of 4.00 percent in our test was worse than the average for all credit unions, a sign that it's on less solid financial footing 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 troubled assets, such as unpaid loans.

A credit union with extensive holdings of these types of assets could eventually be required to use capital to absorb losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, PEOPLE'S ALLIANCE scored 36 out of a possible 40 points, below the national average of 38.09 points.

Troubled assets made up 0.00 percent of PEOPLE'S ALLIANCE's total assets in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand financial trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's earnings test, PEOPLE'S ALLIANCE scored 6 out of a possible 30, lower than the national average of 10.11.

One sign that the credit union is outperforming 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.