THE INSTITUTION'S SCORE
Capital works as a cushion against losses and affords protection for account holders during times of financial instability for the bank. Therefore, a bank's level of capital is an essential measurement of an institution's financial strength. When it comes to safety and soundness, the more capital, the better.
On our test to measure capital adequacy, Mound City Bank received a score of 10 out of a possible 30 points, less than the national average of 13.13.
One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Mound City Bank's Tier 1 capital ratio was 12.41 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial headwinds.
Overall, Mound City Bank held equity amounting to 9.71 percent of its assets, which was lower than the national average of 12.03 percent.