Story updated to include information regarding BankAtlantic.

JUPITER, Fla. ( TheStreet) -- The pace of Florida bank failures slowed during the fourth quarter as "only" five institutions were shuttered by regulators, and it was another difficult quarter overall, as 62% of banks and savings and loan associations in the Sunshine State reported quarterly losses.

Florida had 29 bank failures during 2010, by far the most for any state. So far this year there have been two failures in the state.

According to data provided by SNL Financial, 20 of Florida's 246 banks and thrifts were undercapitalized per ordinary regulatory guidelines as of December 31 - increasing from 17 the previous quarter, despite the bank closures. Florida was second only to Georgia, which had 37 institutions included on TheStreet's fourth-quarter Bank Watch List.

Since the Watch List is based solely on capital ratios, we take a different approach on our quarterly coverage of banks in key states, by looking at overall credit quality to identify troubled institutions.

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).

All of the listed banks lost money during the second quarter, except for First Commercial Bank of Tampa Bay, which reported $4.8 million in net income, as the institution transferred $2.1 million from loan loss reserves, even while net charge-offs - loan losses less recoveries - totaled $2.3 million. The bank was undercapitalized as of December 31, as its Tier 1 leverage ratio was 2.16% and its total risk-based capital ratio was 4.27%. In order to be considered adequately capitalized by regulators - unless ordered to maintain even higher levels of capital, these ratios need to be at least 4% and 8%. For most banks to be considered well-capitalized, the ratios need to be at least 5% and 10%.

The largest Florida institution with NPA exceeding 15% as of December 31 was Vision Bank of Panama City, which is a subsidiary of Park National Corporation ( PRK) of Newark, Ohio. Vision Bank's NPA ratio of 25.68% was high, although its total risk-based capital ratio of 19.55% was fairly strong. The holding company is a source of strength, since it has been profitable over the past ten quarters

The Florida bank with the highest concentration in nonperforming assets as of December 31 was First National Bank of Florida of Milton, with NPA of 29.70%, declining from 31.34% the previous quarter. The bank entered into a cease-and-desist order with the Office of the Comptroller of the Currency in March 2009, under which it agreed to achieve and 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 December 31:

The largest bank chartered in Florida is Northern Trust, NA, which is a subsidiary of Northern Trust Corp. ( NTRS) of Chicago. After achieving a return on assets (ROA) exceeding 0.90% for three straight quarters, the Florida subsidiary's earnings declined to $15.2 million in the fourth quarter, for an ROA of 0.50%, mainly because of a $39.5 million provision for loans losses. Net charge-offs - loan losses less recoveries - totaled $$34 million during the fourth quarter, although the fourth-quarter annualized ratio of net charge-offs to average loans of 1.22% was not excessive for the current environment in Florida.

The second-largest bank in the state is the "new" BankUnited is held by BankUnited, Inc. ( BKU).

BankUnited which 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.

The investor group took the thrift public on January 28.

As you can see on the table, BankUnited is profitable with a solid ROA of 1.53% for the fourth quarter. The thrift was very strongly capitalized even before the holding company went public, with a total risk-based capital ratio of 41.58% as of December 31.

Kanas told TheStreet's Maria Woehr after the IPO that the company would be looking to be "an important part of the consolidation story" for the banking industry, focusing initially on the Southeast.

The third-largest Florida institution is Raymond James Bank, FSB which is a subsidiary of Raymond James Financial ( RJF). The thrift had a good fourth quarter, with $29.2 million in net income for an ROA of 1.27%, as its provision for credit losses declined to $11.2 million from $16.6 million the previous quarter.

On February 23, BankAtlantic of Fort Lauderdale entered into a cease and desist order with the Office of Thrift Supervision, under which the institution agreed to bring its total risk-based capital up to 14% by June 30, and also agreed to limit its lending activities and balance sheet growth.

BankAtlantic is a subsidiary of BankAtlantic Bancorp ( BBX). Alan Levan, the holding company's CEO, said in a statement that the regulatory agreements entered into by the bank and the holding company "formalize steps that we believe are already underway and many have already been fully implemented."

Strongest Florida Banks and Thrifts

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

Florida Bank Failures

There have been two bank failures in Florida so far this year, while Georgia leads all states with six failures in 2011. During 2010, Florida lead all states with 29 bank and thrift failures, followed by Georgia with 21 and Illinois with 16 bank failures.

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 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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