What about the 19 next-largest banking firms?

Or the 19 largest after them?

The disclosure of the stress test results for the nation's largest lenders made it relatively easy for the executives of those firms to decide how to proceed (Exhibit A: the spate of stock offerings in recent days) and helped investors make important judgment calls (see Exhibit A). But investors are still on their own when it comes to calculating the capital adequacy of smaller companies.

That is a problem for people with assets to allocate, as well as for the banking executives who are competing for them.

"There is a certain degree of known exposure for the 19 largest banks, and we don't have that information for the banks behind them," said Kevin Petrasic, former special counsel at the Office of Thrift Supervision and now of counsel in the banking and financial institutions practice at Paul, Hastings, Janofsky & Walker LLP. "It's going to be challenging for investors to parse through what this means for everybody else."

To fill in the gaps, Anthony Davis, an analyst at Stifel, Nicolaus & Co., ran his own stress tests on half a dozen midcap banking companies, using assumptions similar to the ones used by regulators in evaluating the biggest lenders. The results led Davis to conclude that Zions Bancorp. and Huntington Bancshares would have to increase their Tier 1 common equity by a few hundred million dollars apiece. But he acknowledged that his analysis was imperfect.

"It's frustrating in the sense that you don't have the degree of granularity that you did for the top 19. While the regulatory agencies were pretty specific about what they assumed for each loan category, all we could do was take the midpoint for what they did for everybody, and that's not fair, admittedly," Davis said. "But at least it gave us some sense of what these [midcap] banks would have looked like if the losses had been at the median rates assumed for the big banks."

Under those assumptions, First Horizon National Corp. and City National Corp. fared well. First Horizon's estimated 2010 ratio of Tier 1 common equity to risk-weighted assets was 9.96%, and City National's was 6.89% — both well above the 4% threshold recommended in last week's stress-test report.

Marshall & Ilsley Corp. and Synovus Financial Corp. were in the middle of the pack, with ratios above 4%.

Davis calculated Zions' 2010 ratio at 3.37% and said it might need to sell as many as 20 million common shares. Huntington, with an estimated 2.24% ratio, might have to convert $435 million of preferred stock into common shares.

Huntington said executives were not available to comment on the report. Clark Hinckley, senior vice president of investor relations at Zions, said it is not worried by the findings. "Would we like to have more capital? I don't know any bank in this environment that wouldn't. But we are comfortable with the stress tests that we do, and we feel like under the capital norms announced … it would take a very, very outsized series of credit problems to get us below those numbers."

Hinckley also said he did not think Zions is at a disadvantage by not having the results of its regulatory exams disclosed.

"The big message of the stress tests was that the industry is surviving and in fact may not be as bad as some people thought it might be," he said. Midsize banking stocks "actually performed much better last week than the larger banks, which would suggest in fact that investors are comfortable" even with lenders that were not part of the government's report.

William "B.J." Losch, First Horizon's chief financial officer, echoed the sentiment, saying he and his colleagues have been making themselves as accessible as possible to make sure investors' questions are answered. "We want to be open with the investor community and let them come to their own conclusions on what our results are. The more information that can get into the market, the better."

Thane Bublitz, a bank analyst with Thrivent Financial for Lutherans in Appleton, Wis., said he has been trying to extrapolate as much information as he can from the government's report while keeping in mind that the exposures of large and small banking companies tend to be different.

"The top banks have a much higher concentration in nonprime mortgages and credit card" lending, he said; regional banks may have higher concentrations of commercial real estate loans in their portfolios.

In the stress tests he has developed as part of his analysis of bank stocks, most lenders appear sufficiently capitalized, Bublitz said.

"I've been looking at stress scenarios for some of the banks, and most of the ones I've done really have come out OK, even with taking some aggressive assumptions for chargeoffs and cumulative losses," he said. "It's not every bank that is fine, but a good portion is fine on capital, [even though] I'm fully expecting some further deterioration in many of the bank portfolios in the second quarter."

Bublitz said the absence of a government report does not make him feel any less confident in his stock picks, which include Zions and M&I.

"I don't think the government is ignoring smaller banks," he said. "To do the top, say, 100 banks would have taken a lot longer and been a lot harder to manage."

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