Strong Banks Got Stronger in Rescue

The Treasury Department's investment in banks is looking more like a vote of confidence than a rescue operation.

On Monday, a host of regional banks unveiled some $34 billion in preferred equity investments made from the $700 billion bailout bill approved by Congress earlier this month.

Most of the headlines Monday focused on the larger regional banks receiving the bulk of the investments, but a closer look at some of the smaller banks getting help highlights some very strong institutions that didn't need new capital to survive, reassure depositors or expand lending activity.

Many troubled community banks had hoped, as the bailout took shape, that they would receive a piece of the bailout pie.

Five Smallest Treasury Capital Infusions

Click here for larger image.

Source: Company filings, Highline Financial, Inc.

There are three capital ratios in the table. To be considered well-capitalized under regulatory guidelines, a bank or thrift needs to maintain respective leverage, Tier-1 risk-based and total risk-based capital ratios of at least 5%, 6% and 10%. Because it takes loan quality and loan loss reserve levels into account, the total risk-based capital ratio is the one that most often slips below the well-capitalized threshold. None of the bank and thrift holding companies on the list were in immediate danger of slipping below well-capitalized.