THE INSTITUTION'S SCORE
Capital acts as a buffer against losses and provides protection for account holders during times of economic trouble for the bank. Therefore, a bank's level of capital is a valuable measurement of a bank's financial strength. From a safety and soundness perspective, the more capital, the better.
On our test to measure capital adequacy, Southwest Missouri Bank received a score of 8 out of a possible 30 points, below the national average of 13.13.
A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Southwest Missouri Bank's Tier 1 capital ratio was 15.50 percent, higher than 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 economic headwinds.
Overall, Southwest Missouri Bank held equity amounting to 8.92 percent of its assets, which was lower than the national average of 12.03 percent.