THE INSTITUTION'S SCORE
Capital acts as a bulwark against losses and as protection for depositors during times of economic trouble for the bank. Therefore, when it comes to measuring an an institution's financial fortitude, capital is important. When it comes to safety and soundness, the more capital, the better.
Bank Midwest came in below the national average of 13.13 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.
One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Bank Midwest's Tier 1 capital ratio was 10.64 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.
Overall, Bank Midwest held equity amounting to 10.35 percent of its assets, which was lower than the national average of 12.03 percent.