The Federal Reserve's findings, released late Thursday afternoon, show the financial system, like the overall economy, is getting better but not yet healed.
Some of the largest banks are stable, the tests found. But others need billions more in capital -- a signal by regulators that the industry is vulnerable but viable. Government officials have said a stronger banking system is needed for an economic rebound.
Government officials hope the tests will restore investor confidence that not all banks are weak, and that even those that are can be strengthened. They have said none of the banks will be allowed to fail.
Banks that need more capital will have until June 8 to develop a plan and have it approved by their regulators. Banks will then have six months to implement the plans.
Analysts said the test results sketched an encouraging but cautious picture of the banks.
"Looking at the big picture, you can say that things aren't so bad for the financial industry as a whole," Kevin Logan, chief U.S. economist at Dresdner Kleinwort, told the Associated Press.
But Logan said attracting fresh capital will be a challenge for banks that need it.
"The banking industry is not going to make a lot of money going forward, and that's a dilemma for keeping banks solvent and getting them lending," he said.
Of the 19 companies tested, these 10 were found to need more capital: Bank of America Corp., $33.9 billion; Wells Fargo & Co., $13.7 billion; GMAC LLC, $11.5 billion; Citigroup Inc., $5.5 billion; Birmingham, Ala.-based Regions Financial Corp., $2.5 billion; Atlanta-based SunTrust Banks Inc., $2.2 billion; Cleveland-based KeyCorp, $1.8 billion; Morgan Stanley, $1.8 billion; Fifth Third Bancorp, $1.1 billion; and Pittsburgh-based PNC Financial Services Group Inc., $600 million.
Nine companies have not been asked to raise more capital: JPMorgan Chase, Goldman Sachs Group, MetLife, Minneapolis-based U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., Capital One Financial Corp., BB&T Corp. and American Express Co.
Before the test results were publicly released, Wells Fargo & Co, the fourth-largest U.S. bank, announced Thursday a $6 billion common stock offering. The San Francisco-based bank -- in which Warren Buffett's Berkshire Hathaway Inc is the largest shareholder -- took $25 billion of capital from the government's Troubled Asset Relief Program last fall.
While Wells Fargo said when it accepted the TARP money that it did not need the funds, its capital ratios are now lower than those of many rivals. On Dec. 31, Wells Fargo bought Wachovia Corp for $12.5 billion, and immediately wrote down $37.2 billion of riskier Wachovia loans.
Morgan Stanley said it plans to raise $5 billion. That will include $2 billion in common stock.
Earlier Thursday, Federal Reserve Chairman Ben Bernanke said the tests are fair, comprehensive and should allow markets to have greater confidence. Echoing remarks made earlier this week by Federal Deposit Insurance Corp. Chair Sheila Bair, Bernanke called for a holistic approach to strengthening oversight of the banking system to prevent future financial crises as he spoke to a Fed conference in Chicago via satellite.
Regulators must not only sharpen their assessments of individual banks, but also examine the financial system as a whole to detect risks that could endanger the normal flow of credit, market operations and commerce -- critical elements to the smooth functioning of the U.S. economy, Bernanke said.
"A principal lesson of the crisis is that an approach to supervision that focuses narrowly on individual institutions can miss broader problems that are building up in the system," the Fed chief said.
Bernanke earlier this week said he was hopeful banks could raise capital on their own, rather than having to rely on the government for aid.
The test results are the culmination of a months-long exercise aimed at tackling one of the thorniest problems of the financial crisis: how to revive top banks and get credit flowing again -prerequisites to turning around the economy.
Treasury Secretary Timothy Geithner said in an opinion piece in The New York Times that he expects banks will pay back more than the $25 billion of government rescue funds that he had previously estimated.
Geithner also wrote that the stress tests applied "exacting" loss estimates and conservative earnings estimates, an apparent rebuff to critics who have questioned whether the tests were tough enough.
The relatively positive news on the banks is a welcome development for President Barack Obama, who is under pressure to show that his steps aimed at rebuilding the U.S. economy are working.
His team appeared to manage market expectations well, releasing the worst news about Bank Of America two days ago.