Small Bank Credit Woes Begin to Show

The credit crisis and housing downturn that has turned big banks like Washington Mutual(WM Quote) and Citigroup(C Quote) on their ears is beginning to force smaller financial institutions on the capital-raising bandwagon.

In the last week alone, at least three small banks took the initiative to raise capital -- Citizens Republic Bancorp (CRBC Quote),Webster Financial(WBS Quote) and UCBH Holdings(UCBH Quote).

So far this year, more than 50 banks have raised roughly $99 billion in capital through either preferred stock, trust preferred securities, common stock offerings or some combination thereof, according to an analysis by Sandler O'Neill & Partners. Of the list, banks with market capitalizations under $2 billion accounted for less than 3% of the total capital raised this year, Sandler says. The analysis excludes senior and subordinated debt as well as overallotment options. ...