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TheStreet Open House

Florida Banks: Strongest and Weakest

Story updated to include information regarding BankAtlantic.

JUPITER, Fla. ( TheStreet) -- The pace of Florida bank failures slowed during the fourth quarter as "only" five institutions were shuttered by regulators, and it was another difficult quarter overall, as 62% of banks and savings and loan associations in the Sunshine State reported quarterly losses.

Florida had 29 bank failures during 2010, by far the most for any state. So far this year there have been two failures in the state.

According to data provided by SNL Financial, 20 of Florida's 246 banks and thrifts were undercapitalized per ordinary regulatory guidelines as of December 31 - increasing from 17 the previous quarter, despite the bank closures. Florida was second only to Georgia, which had 37 institutions included on TheStreet's fourth-quarter Bank Watch List.

Since the Watch List is based solely on capital ratios, we take a different approach on our quarterly coverage of banks in key states, by looking at overall credit quality to identify troubled institutions.

Florida Banks with Weakest Asset Quality

The following list includes all banks in the state with nonperforming assets comprising more than 15% of total assets:

Nonperforming assets (NPA) include nonaccrual loans, loans past due 90 days or more and repossessed assets. Government-guaranteed loan balances are excluded

The list also includes financial strength ratings provided by Weiss Ratings. Weiss Ratings uses a very conservative ratings model, placing the greatest weight on capital strength, credit quality and earnings stability to assign ratings ranging from A-plus (Excellent) to E-minus (Very Weak).

All of the listed banks lost money during the second quarter, except for First Commercial Bank of Tampa Bay, which reported $4.8 million in net income, as the institution transferred $2.1 million from loan loss reserves, even while net charge-offs - loan losses less recoveries - totaled $2.3 million. The bank was undercapitalized as of December 31, as its Tier 1 leverage ratio was 2.16% and its total risk-based capital ratio was 4.27%. In order to be considered adequately capitalized by regulators - unless ordered to maintain even higher levels of capital, these ratios need to be at least 4% and 8%. For most banks to be considered well-capitalized, the ratios need to be at least 5% and 10%.

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