WASHINGTON ( TheStreet) -- State regulators in Florida and Washington shut down two banks on Friday, bringing the total number of U.S. bank failures for 2010 to 129.

Both failed banks were previously included in TheStreet's Bank Watch List of undercapitalized institutions, based on second-quarter regulatory data provided by SNL Financial.

Wakulla Bank

The Florida Office of Financial Regulation took over Wakulla Bank of Crawfordville, Fla. and appointed the Federal Deposit Insurance Corp. receiver. The FDIC then sold the failed bank to Centennial Bank of Conway, Ark.

Wakulla Bank had about $424 million in total assets and $386 million in deposits and was undercapitalized since the end of last year, when $17.8 million in net losses for 2009 left it with a tier 1 leverage ratio of 4.87% and a total risk-based capital ratio of 7.67%. These ratios need to be 5% and 10%, respectively, for most banks and thrifts to be considered well-capitalized by regulators. The ratios need to be 4% and 8% for most institutions to be considered adequately capitalized.

As of June 30, the capital ratios had dropped to 0.94% and 2.61%, respectively, following another $15 million in net losses during the first half of 2010. The bank's ratio of nonperforming assets -- including loans past due 90 days or in nonaccrual status, along with repossessed real estate -- to total assets was 14.24% as of June 30.

The FDIC entered into a loss-sharing agreement with Centennial Bank, under which the agency would cover 80% of losses on $213 million of the assets acquired. The failed bank's 12 branches were scheduled to reopen Saturday as Centennial Bank branches, and the FDIC estimated the cost of Wakulla Bank's failure to the deposit insurance fund would be $113.4 million.

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Centennial Bank is the main subsidiary of Home BancShares ( HOMB), and Wakulla Bank was its fifth acquisition in Florida this year, following Old Southern Bank of Orlando and Key West Bank, which failed in March, and Bayside Savings Bank and Coastal Community Bank of Panama City, Fla., which both failed on July 30.

Shoreline Bank

State regulators closed Shoreline Bank of Shoreline, Wash. The FDIC was appointed receiver and sold the failed bank's $100 million in deposits for a 0.25% premium to GBC International Bank of Los Angeles, Calif. The failed bank had approximately $104 million in total assets.

GBC International Bank also acquired $66 million of the failed banks assets, with the FDIC retaining the rest for later disposition. The FDIC agreed to share in losses on $49 million of the acquired assets and estimated the cost to the deposit insurance fund would be $41.4 million. Shoreline's three branches were set to reopen during normal business hours as branches of GBC International bank.

Shoreline Bank also slipped to undercapitalized in the fourth quarter of 2009, after net losses totaling $9.9 million for the year. Losses continued during the first half of 2010, and the bank's tier 1 leverage ratio was 1.59% while its total risk-based capital ratio was 2.41% as of June 30. The bank's nonperforming assets ratio at the end of the second quarter was 23.46%.

A December order from State Regulators and the FDIC required Shoreline Bank to "retain qualified management" and increase its tier 1 leverage ratio to 10% and its total risk-based capital ratio to 12% within 120 days. This would be a tall order for any community bank with a high level of problem assets, with potential acquirers likely to prefer scooping up a troubled bank after it fails, with substantial FDIC assistance.

Thorough Bank Failure Coverage

Florida Illinois Georgia

Florida leads all states with 25 bank closures this year, followed by 15 in Illinois and 14 failures in Georgia.

All bank and thrift failures since the beginning of 2008 are detailed in TheStreet.com's interactive bank failure map:

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.


-- 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.