Florida Going Bust -- Half of Its Banks Are Unprofitable

NEW YORK (TheStreet) -- Nearly a third of Florida's banks and thrifts have disappeared over the past four years and things aren't getting better: Almost half of the Sunshine State's financial institutions lost money during the fourth quarter.

As we discussed on our coverage of banks in Illinois and Georgia, even community banks that have managed to weather the real estate crisis are facing a seemingly endless regulatory assault on various revenue streams. With share prices for so many would-be acquirers recovering this year, it's only a matter of time before we see a wave of bank merger deals.

Community banks face a major threat to their "free checking" business model, with the latest regulatory pressure on profits coming from the Consumer Financial Protection Bureau, which last Wednesday announced that it had "launched an inquiry into checking account overdraft programs to determine how these practices are impacting consumers," with Director Richard Cordray saying that "overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it."

Irrespective of pressure son fee revenue, and despite the disappearance of over 90 institutions over the past four years, there were still 24 undercapitalized Florida banks and thrifts as of Dec. 30, according to data provided by HighlineFI, not including Central Florida State Bank of Belleview and First Guaranty Bank and Trust Co. of Jacksonville, both of which failed in January and were sold by the Federal Deposit Insurance Corp. to CenterState Banks (CSFL) of Davenport, Fla.

Please see TheStreet's Bank Watch List for a full listing of all the banks and thrifts across the country that were undercapitalized, per normal regulatory guidelines.

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 as of Dec 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.

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