Editor's Note: This story has been corrected to include First Republic Bank's third-quarter net income of $66.4 million and 0.00% net charge-off ratio.



) -- While California has had its share of bank failures, its banking industry is showing signs of recovery.

According to data supplied by SNL Financial, 73% of banks and thrifts headquartered in the Golden State turned a profit during the third quarter, compared to 63% of U.S. all banks in thrifts, as reported by the

Federal Deposit Insurance Corp.

in its

Quarterly Banking Profile


California's Largest Banks

The list 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 ten of the largest California banks were profitable during the third quarter, including newly-independent

First Republic Bank

(FRC) - Get Report

of San Francisco, which had been purchased by Merrill Lynch for $1.8 billion in September 2007. Merrill Lynch was acquired by Bank of America in January 2009 and First Republic's management purchased the bank from Bank of America on July 1 in a non-cash transaction. First Republic's shares began trading Thursday on the New York Stock Exchange after an initial public offering at $25.50 a share.

The largest bank headquartered in California is

Union Bank, NA

, which is held by

Mitsubishi UFJ Financial Group


. The bank ranked third for deposit market share in the state as of June 30 according to the FDIC, with $61.5 billion in deposits in California.

Bank of America, NA


Bank of America's

(BAC) - Get Report

main banking subsidiary) took first place with $222 billion in California deposits, followed by

Wells Fargo Bank, NA

(held by

Wells Fargo

(WFC) - Get Report

, which placed second with $162 billion in deposits gathered through branches in the state.

The fourth-ranked bank for California deposits was

JPMorgan Chase Bank, NA

(held by

JPMorgan Chase

(JPM) - Get Report

) with $61 billion, followed by

Citibank, NA

(held by


(C) - Get Report

, in fifth-place with $47.6 billion in deposits.

Moving back to banks actually headquartered in the state, standouts include

OneWest Bank, FSB

of Pasadena, which was formed in March 2009 when an investor group purchased the former IndyMac Bank -- which had failed in July 2008 -- from the FDIC. OneWest earned $92.8 million during the third quarter, for a return on average assets (ROA) of 1.35%, which among the largest ten California banks was only bested by

BlackRock Institutional Trust

(held by


(BLK) - Get Report

), which achieved an impressive third-quarter ROA of 4.89%, on rising investment banking and trust fee revenue.

BlackRock Institutional Trust isn't rated by Weiss, as the institution focuses on its investment banking and fiduciary services, has no loan portfolio and doesn't gather deposits. The only institution among the largest ten California banks rated B (good) or higher by Weiss is

Silicon Valley Bank

of Santa Clara, which is held by

SVB Financial Group

(SIVB) - Get Report


Strongest California Banks and Thrifts

Based on third-quarter financial reports, 17 California institutions were rated B (good) or above by Weiss Ratings:

Two California banks were rated an A by Weiss Ratings. These were

California First National Bank

of Irvine (held by

California First National Bancorp


) and

Farmers & Merchants Bank of Central California

, which is a subsidiary of

Farmers & Merchants Bancorp



California Banks with Weakest Asset Quality

According to data provided by SNL Financial, five of California's 279 banks and thrifts were


per ordinary regulatory guidelines as of September 30.


had the highest number of institutions on



Bank Watchlist

with 42 undercapitalized institutions, followed by


with 17 undercapitalized banks and thrifts as of September 30.

Another approach in identifying the weakest banks is to look at overall credit quality. The following list includes all banks in the state with nonperforming assets comprising more than 10% of total assets as of asset quality:

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

While OneWest Bank, FSB also appears on this list, the institution has a very strong total risk-based capital ratio of 45.77% and its net charge-off ratio of zero reflects the FDIC loss-sharing agreement on its nonperforming loans.

California Bank Failures

There have been 12 bank failures in California so far this year, with a total of 34 since the current wave of bank closures began in 2008.

All previous bank and thrift failures since the beginning of 2008 are detailed in


interactive bank failure map:

All bank and thrift closures since the beginning of 2008 are detailed in


interactive bank failure map:

Image placeholder title

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark gray, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2010 totals. Then click the state to open a detailed map pinpointing the locations and providing additional information for each bank failure.


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Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.