JUPITER, Fla. ( TheStreet) -- An analysis of Florida's banking scene underlines the state's move to the forefront for bank failures during 2010, as 55% of banks and savings and loan associations in the Sunshine State reported net losses for the second quarter.

According to data provided by SNL Financial, 21 of Florida's 261 banks and thrifts were undercapitalized per ordinary regulatory guidelines, second only to Georgia, which had 39 institutions included on TheStreet's second-quarter Bank Watchlist.

While the Watchlist is a very comprehensive way of identifying the weakest banks, another approach is to look at overall credit quality:

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, with data provided by SNL Financial:

Nonperforming assets (NPA) include repossessed real estate -- along with nonaccrual loans and accruing loans past-due 90 days or more -- and less government-guaranteed balances.

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

While all of the listed banks lost money during the second quarter, several had fairly high total risk-based capital ratios.

The institution with the highest concentration in nonperforming assets in the state as of June 30 was First National Bank of Florida, with NPA of 30.01%. Most of the problem assets were commercial construction loans. The bank wasn't included on the Watchlist because its Tier 1 leverage ratio was 5.47% and its total risk-based capital ratio was 8.36% as of June 30, above the 4% and 8% required for most institutions to be considered adequately capitalized.

A cease and desist order from the Office of the Comptroller of the Currency issued in March 2009 required First National Bank of Florida to maintain a total risk-based capital ratio of at least 12.5% by June 30, 2009, which means the bank was out of compliance for a year. A call to the bank was not returned in time for this article.

The bank with the second-highest nonperforming assets ratio -- 23.08% as of June 30 -- was Vision Bank of Panama City, which was also the largest bank on the list with $863 million in total assets. Vision Bank is a subsidiary of Park National Corp. ( PRK) of Newark, Ohio. Vision Bank was well capitalized as of June 30, with a Tier 1 leverage ratio of 13.18% and a total risk-based capital ratio of 17.84%, exceeding the 5% and 10% thresholds required for most banks to have this distinction. The holding company has been working through its nonperforming assets, which comprised 4.24% of total assets as of June 30. Park National has been profitable over the past year, serving as a source of strength for Vision Bank.

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