These Banks Need to Raise Capital Quickly

If you're wondering whether your bank has enough capital, keep reading.

Capital adequacy is the most important topic for bankers as the real estate credit crisis continues. So far this year there have been three bank failures, the most recent being ANB Financial, which was considered "critically undercapitalized" by regulators, and was closed down on May 9. Several other institutions with capital adequacy concerns have been acquired recently, or are making merger deals as we speak.

While most depositors are protected by FDIC insurance, chances are you know someone affiliated with a business or municipality (such as a school district) with large deposits in a local bank. Since most of these deposits are uninsured, it's important to monitor bank ratings using TheStreet.com's Ratings Screener.

In better times than these, banks and S&Ls walk a fine line. If they hold too little capital, their solvency could be at risk. If they hold too much capital, their return on equity suffers, which irritates investors. ...