Updated from 10/22/10

Updated to include information about a seventh bank failure on Friday.

WASHINGTON ( TheStreet) -- Regulators Friday shuttered seven banks spread across five states, bringing the total number of U.S. bank failures for 2010 to 139.

The bank closures cost the Federal Deposit Insurance Corp.'s insurance fund a combined $461.8.2 million. The agency found buyers for all of the failed institution save one, and there were some losses to depositors with uninsured balances.

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

First Bank of Jacksonville

The Florida Office of Financial Regulation closed First Bank of Jacksonville and appointed the FDIC receiver. The FDIC then sold the failed bank to Ameris Bank of Moultrie, Ga.

First Bank of Jacksonville had been operating under an FDIC consent order since October 2009, when regulators ordered the institution's board of directors to "reaffirm its participation in the affairs of the Bank," by improving its oversight and taking steps to "retain qualified management." The bank was also required to charge off its most troubled loans within 30 days and increase its Tier 1 leverage ratio to 8% and its total risk-based capital ratio to 12% within 120 days.

Those ratios need to be 5% and 10%, respectively, for most banks to be considered well-capitalized by regulators, and 4% and 8%, respectively, for most to be considered adequately capitalized. Over the past two years, hundreds of banks have been required by regulators to hold much higher levels of capital to absorb loan losses.

As of June 30, First Bank of Jacksonville's Tier 1 leverage ratio was 0.83% and its total risk-based capital ratio was 2.41%. The bank's ratio of nonperforming assets -- including loans past due over 90 days or in nonaccrual status and repossessed real estate -- made up 13.99% of total assets.

First Bank of Jacksonville had $81 million in total assets when it failed. The FDIC agreed to absorb 80% of losses on $60 million of the assets acquired by Ameris Bank and estimated that the cost of the bank closure to the deposit insurance fund would be $16.2 million.

The failed bank's office was scheduled to reopen Monday as an Ameris branch.

Ameris Bank is the main subsidiary of Ameris Bancorp ( ABCB).

Progress Bank of Florida

State regulators also closed Progress Bank of Florida, which was based in Tampa, Fla. The FDIC was appointed receiver and sold the failed bank to Bay Cities Bank, also of Tampa.

Progress Bank of Florida had $111 million in assets when it failed and had slipped to undercapitalized in the fourth quarter of 2009. That's when its nonperforming assets ratio doubled from the previous quarter to 14.66% and it posted a net loss of $6.7 million, mainly from loan loss provisions. After two more quarters of losses, the bank's Tier 1 leverage ratio was 1.41% and its total risk-based capital ratio was 3.32% as of June 30, and its nonperforming assets ratio was 16.69%.

The FDIC agreed to share in 80% of losses on $83 million of the assets acquired by Bay Cities Bank and estimated the cost of the bank failure to the deposit insurance fund would be $25 million.

Progress Bank of Florida's two branches were set to reopen Monday as branches of Bay Cities Bank.

The Gordon Bank

The Georgia Department of Banking and Finance took over The Gordon Bank of Gordon, Ga. As receiver, the FDIC sold the failed institution's $26.7 million in deposits for a 0.05% premium to Morris Bank of Dublin, Ga.

The Gordon Bank had $29.4 million in total assets when it failed. Morris Bank purchased $11.5 million in assets from the FDIC, and the agency retained the rest for later disposition and estimated the failure would cost the deposit insurance fund $9 million.

Gordon Bank's office was scheduled to reopen Monday as a Morris Bank branch.

The First National Bank of Barnesville

The Office of the Comptroller of the Currency shut down The First National Bank of Barnesville, Ga, which had $127 million in total assets. As receiver, the FDIC sold the failed institution to United Bank of Zebulon, Ga. and agreed to share in losses on $107 million of the acquired assets and estimated the failure would cost the deposit insurance fund $33.9 million.

The First National Bank of Barnesville's two branches were to reopen Saturday as United Bank branches.

This was United Bank's third acquisition of a failed institution during the current cycle of bank failures that began in 2008, following the purchase of First Georgia Community Bank of Jackson in December 2008 and First Coweta Bank of Newnan, Ga. in August 2009.

First Suburban National Bank

The OCC also closed First Suburban National Bank of Maywood, Ill., which the FDIC as receiver sold to Seaway Bank and Trust Company of Chicago.

First Suburban had $149 million in total assets, and the FDIC agreed to share in losses on $117 million of the assets acquired by Seaway Bank And Trust. The agency estimated the bank failure would cost the deposit insurance fund $$31.4 million.

The failed bank's four branches were to reopen Saturday as Seaway branches.

Hillcrest Bank

The largest bank to fail on Friday was Hillcrest Bank of Overland Park, Kan., which had $1.65 billion in total assets when it was closed by state regulators. The FDIC sold all of the bank's deposits and assets to the newly formed Hillcrest Bank, NA, which was organized by NBH Holdings Corp. of Boston.

NBH announced a deal in July to acquire Bank Midwest NA, of Kansas City, Mo. from Dickinson Financial Corp. and plans to merge the new Hillcrest Bank, NA into it in 2011.

The FDIC agreed to share in losses on $1.15 billion of the failed bank's assets acquired by the new Hillcrest Bank, NA and estimated the cost to the deposit insurance fund would be $329.7 million. Hillcrest's 41 branches were set to reopen during normal business hours as branches of the new Hillcrest Bank, NA.

The old Hillcrest had been undercapitalized since the fourth quarter of 2009, following a net loss of $41 million from provisions for loan losses. Net losses of $62.9 million during the first half of 2010 left the bank with critically low Tier 1 capital and total risk-based capital ratios of 0.59% and 1.63%, respectively, as of June 30.

Hillcrest Bank

The Office of Thrift Supervision closed First Arizona Savings, FSB, which had $272 million in total assets and $199 million in deposits. The FDIC was unable to find a buyer for the failed thrift, and estimated that there were $5.8 million in deposits exceeding insurance limits, although this amount was subject to change as additional customer information was made available to the agency.

The FDIC said it would mail checks to depositors for their insured balances on Monday.

Thorough Bank Failure Coverage

Florida leads all states with 27 bank closures this year, followed by Illinois and Georgia with 16 failures each.

All bank and thrift failures since the beginning of 2008 are detailed in TheStreet'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. Clicking on a state opens 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.

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