JUPITER, Fla. ( TheStreet) -- The third quarter was another rough one for Florida's banking industry, with another 10 institutions failing and 53% of banks and savings and loan associations in the Sunshine State reporting quarterly losses.

So far this year, Florida has had 28 bank failures, by far the most for any state.

According to data provided by SNL Financial, 17 of Florida's 252 banks and thrifts were undercapitalized per ordinary regulatory guidelines as of Sept. 30, making Florida second only to Georgia, which had 41 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:

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

The list also 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).

While all of the listed banks lost money during the second quarter, several, including Vision Bank of Panama City (a subsidiary of Park National Corp. ( PRK) of Newark, Ohio) and Beach Community Bank of Fort Walton Beach, had fairly high total risk-based capital ratios. Unless under regulatory orders to hold additional capital, most banks and thrifts need to maintain a total risk-based capital ratio of at least 10% to be considered well-capitalized.

The Florida bank with the highest concentration in nonperforming assets as of September was First National Bank of Florida of Milton, with NPA of 31.34%, increasing from 30.01% the previous quarter. The bank was added to TheStreet's Watchlist because its total risk-based capital ratio slipped below the 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, and the regulator has not announced a subsequent order.

Florida's Largest Banks

Here are the 10 largest Florida banks, along with key metrics as of Sept. 30:

Two of the largest banks in the state are preparing to go public. The "new" BankUnited announced on Oct. 29 that its investor group will form a new holding company, offering $300 million in shares to the public. The offering has yet to be priced, and is expected to be traded on the New York Stock Exchange under the symbol BKU.

This bank was formed by an investor group led by John Kanas to acquire the old BankUnited FSB from the Federal Deposit Insurance Corp. after the thrift failed in May 2009.

Kanas is the former CEO of North Fork Bancorporation of New York, which was acquired by Capital One Financial ( COF) in 2006.

EverBank of Jacksonville announced plans for an initial public offering on Oct. 8 and expects to raise a maximum of $200 million. Details on the number of shares being offered and pricing haven't been announced. The thrift acquired the three failed subsidiaries of Bank of Florida in May.

The largest bank in Florida by total assets at the end of the second quarter was Northern Trust, NA of Miami, which is a subsidiary of Northern Trust Corp. ( NTRS) of Chicago. Despite having a much higher concentration in loans than Northern Trust company's main banking subsidiary, the Florida subsidiary has remained quite profitable and has good asset quality, considering the economic environment. The bank's "B" rating from Weiss -- based on second-quarter financial results -- is the highest among the largest Florida banks.

Raymond James Bank, FSB is a subsidiary of Raymond James Financial ( RJF). Like the other three Florida institutions with more than $10 billion in total assets, the thrift's earnings during the third quarter measured up well, with a return on average assets of 0.73%, compared with the aggregate industry aggregate ROA of 0.44% reported by the FDIC in its Quarterly Banking Profile .

Strongest Florida Banks and Thrifts

Based on second-quarter financial reports, eight Florida institutions were rated B (good) or above by Weiss Ratings:

Florida Bank Failures

There have been 28 bank failures in Florida so far this year, followed by Georgia with 18 and Illinois with 16 bank failures. Since the current wave of bank closures began in 2008, Georgia has had the most, with 48 institutions shuttered by regulators. Next is Florida, which has had 44 failures, then Illinois with 38 and California, with 34.

Please click here for a summary of last week's bank failures.

All previous 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. 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.

>To contact the writer of this article, click here: Philip van Doorn.

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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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