THE INSTITUTION'S SCORE
Capital works as a cushion against losses and as protection for account holders during times of economic instability for the bank. It follows then that when it comes to measuring an a bank's financial resilience, capital is key. When looking at safety and soundness, the higher the capital, the better.
On our test to measure capital adequacy, Alliance Bank Central Texas received a score of 6 out of a possible 30 points, failing to reach the national average of 13.13.
One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Alliance Bank Central Texas's Tier 1 capital ratio was 12.10 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.
Overall, Alliance Bank Central Texas held equity amounting to 8.46 percent of its assets, which was lower than the national average of 12.03 percent.