PNC Financial Services Group Inc., the biggest bank in the region and state, is one of 10 major financial institutions that must boost capital as a safety net against continued declines in the economy, according to the results of the federal government's long-awaited "stress tests" of the nation's 19 largest banks.

Pittsburgh-based PNC was told it must raise $600 million, the least amount among the banks found to have a shortfall. Bank of America, which was told it needed $33.9 billion in additional capital, was found to have the biggest deficit.

Bank of New York Mellon was one of nine companies that passed the stress test, which was designed to bolster confidence in the U.S. banking system.

Forcing banks to raise more capital would help ensure they are in good shape and able to keep lending if the recession deepened this year, a scenario that assumes a jobless rate of just over 10 percent and an additional 22 percent drop in home prices.

PNC and the nine other banks with shortfalls will have until June 8 to come up with a plan to raise the money and have it approved by regulators. They will have six months to implement the plan.

PNC will raise the $600 million by growing earnings and through "other capital markets alternatives," the bank said in a statement yesterday shortly after the results were released.

The bank said it has no plans to raise capital by converting the U.S. Treasury's preferred shares -- purchased under the bailout plan last year -- into common stock. Doing so would give the government an ownership stake in PNC.

PNC received $7.6 billion in bailout funds late last year in the form of preferred shares the government bought from PNC, money that must be repaid within 10 years. So far, PNC has paid about $140 million in dividends on those shares.

Both PNC and regulators yesterday noted that all 19 institutions were considered well capitalized under current conditions and standards.

Besides PNC and Bank of America, the other companies told to beef up capital were Citigroup, $5.5 billion; Fifth Third Bancorp, $1.1 billion; GMAC, $11.5 billion; KeyCorp., $1.8 billion; Morgan Stanley, $1.8 billion; Regions Financial, $2.5 billion; SunTrust Banks, $2.2 billion; and Wells Fargo & Co., $13.7 billion.

In addition to BNY Mellon, the other companies that were told they had adequate capital were JPMorgan Chase, Goldman Sachs Group, MetLife, U.S. Bancorp, State Street, Capital One Financial, BB&T and American Express.

PNC would not elaborate on exactly how it would raise the money, but options could include issuing stock to the public, cashing in investments and selling off businesses, which might not be easy or fetch the best prices in the current economy.

Another option for the banks, which PNC ruled out for now, would be to convert the Treasury's stake in the companies to common stock. The move technically would not raise new money, but would reclassify the government's investment from preferred shares, which are similar to a loan, to capital in the form of common stock, which is the key measure of the stress tests.

Under that scenario, the government would lose its dividend payments on the preferred shares and would have fewer assurances its investment would eventually be repaid.

Another option is for banks to ask for more taxpayer money.

"Many of the institutions have already taken actions to bolster their capital buffers and are well-positioned to raise capital from private sources over the next six months," Federal Reserve Chairman Ben Bernanke said after releasing the stress test results.

Still, he said, the government "stands ready to provide whatever additional capital may be necessary to ensure that our banking system is able to navigate a challenging economic downturn."

The current crisis is "one of the most challenging financial and economic episodes in modern history," Mr. Bernanke said, but one that will be overcome "with insight, patience and persistence."

PNC had already initiated some measures to conserve cash in recent months, including slashing the quarterly common stock dividend by 85 percent, to 10 cents per share from 66 cents, and announcing plans to cut 5,800 jobs over the next two years. The workforce reduction includes 4,000 jobs that National City Corp. had said it would be eliminating before PNC acquired the troubled Cleveland-based bank Dec. 31.

Until yesterday, PNC and other banks under review had been largely silent about the matter at the request of the government. But in recent days some results began leaking out, prompting analysts and other observers to predict that roughly half of the 19 institutions would fail the test.

The tests found that if the recession were to worsen, losses at the 19 companies could total $600 billion over the next two years. At PNC, losses could total $18.8 billion, the government said.

Government officials yesterday stressed that all 19 institutions were solvent. And the government has made it clear that none of them would be allowed to fail. So far this year, 32 financial institutions have collapsed and had their deposits assumed by the Federal Deposit Insurance Corp. None was in Pennsylvania.

"Looking at the big picture, you can say that things aren't so bad for the financial industry as a whole," said Kevin Logan, chief U.S. economist at Dresdner Kleinwort.

But he said that 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.

Financial stocks surged in after-hours trading following release of the report at 5 p.m.

The government's unprecedented decision to publicly release bank exams has led some critics to question whether the findings are credible. Some said regulators seemed so intent on sustaining public confidence in the banks that the results would have to find the banks basically healthy, even if some need to raise more capital.

"While the stress tests reveal a better-than-expected picture of the present and future capitalization of the banking system ... credit markets are a heck of a long way from functioning normally and in a manner that would be constructive for economic recovery," said Brian Bethune, chief financial economist at IHS Global Insight.