@Brandon9000,
It depends on how high is "high". As you know, banks make their profits mostly by borrowing money at low interest rates (through their customers' checking accounts, in particular) and lending it out at a higher interest rate or investing it in profitable projects. If their debt-to-equity ratio was zero, they'd have no cash to lend out and do their business with. If it was too high, it would threaten their solvency when their cash flow dries up.
I am not an expert on bank stocks, but for what it's worth,
Investopedia says a typical debt-to-equity ratio for banks is 2.2 for commercial banks, 3.3 for investment banks. This might give you a baseline for deciding if the debt-to-equity ratio of the bank your considering is "too high" or not.
Another thing to watch: When a bank goes under, the reason is usually not that the overall debt is too large, but that its time to maturity is too short. Much, sometimes most of a bank's debt is the balance in its customers' checking accounts, which is theoretically redeemable at a moment's notice. So when many customers decide at the same time to withdraw their cash holdings, this can create a risk to the bank's solvency.
To assess this risk, it's important that you pay attention to your bank's reserves --- how much of its debt it holds in cash or cash deposits at the central bank. Again, I'm not qualified to advise you about specific reserve amounts or ratios. But you should get a decent picture by comparing your bank's reserves to the industry average, and to the minimum requirements set by the Fed.
Hope that helped.
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