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TheStreet Open House

Florida's Weakest Banks Vanish

JUPITER, Fla. ( TheStreet) -- The pace of Florida bank failures has picked up during the third quarter, as weaker players are shaken out, and eight of the ten largest banks and thrifts in the state were profitable during the second quarter.

While several of the large Florida banks have been posting strong earnings, the picture remains bleak for many community banks. Economic activity has yet to perk up, although there's always hope, since many of the economic factors leading to a great migration from northern states during the real estate boom -- including the absence of a state income tax, lower property taxes, lower property prices, and a lower cost of living in general -- are still present.

Seacoast Banking Corp. (SBCF) CEO Dennis Hudson recently said that there were signs that the real estate market was stabilizing in South Florida.

Meanwhile, the weakest banks in the state are continuing to be swallowed up by stronger rivals.

According to data provided by SNL Financial, 18 of Florida's 236 banks and thrifts were undercapitalized per ordinary regulatory guidelines as of June 30 and were included on TheStreet's second-quarter Bank Watch List, excluding The First National Bank of Florida, which failed on Sept. 9.

Florida was second only to Georgia, which had 32 institutions included on TheStreet's second-quarter Bank Watch List.

Florida has seen 11 banks fail so far this year, second only to Georgia with 19 bank closures, but still behind last year's pace, when Florida led all states with 29 bank and thrift failures.

The Watch List is based solely on capital ratios, so 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 as of June 30:

Nonperforming assets (NPA) include nonaccrual loans, loans past due 90 days or more and repossessed assets. Government-guaranteed loan balances are excluded. The ratio of net charge-offs to average loans is annualized. The total risk-based capital ratios needs to be at least 8% for most institutions to be considered adequately capitalized by regulators, and 10% for most to be considered well-capitalized.

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