Nov. 24--Some local banks did show improvement in the third quarter of this year. But overall, the amount of bad loans on the books of Jacksonville-based financial institutions continued to grow, according to the quarterly reports filed by the banks with federal regulators.

"Overall, banks in this country and the state of Florida continue to deteriorate," said Ben Bishop, a banking analyst who is chairman of Allen C. Ewing & Co. in Jacksonville.

Half of the 16 FDIC-insured banks headquartered in the Jacksonville area did reduce their level of problem loans between the end of the second quarter and the end of the third quarter. But 14 of the banks have recorded net losses through the first nine months of the year, and the net total level of noncurrent loans at the 16 banks rose by 4 percent.

The Jacksonville Bank was one of two local banks to record a profit (Everbank was the other) and also showed the most improvement in the quality of its loan portfolio. The amount of noncurrent loans on its books -- that is loans, that are at least 90 days overdue -- fell by 59 percent during the third quarter.

Gilbert Pomar, CEO of Jacksonville Bank, said his bank was not saddled with a lot of residential construction loans when the real estate market tanked. "That's where a lot of the problems for banks began," he said.

Pomar also said that for a community bank like his, a couple of large loans can make the difference between a good or a bad loan portfolio. "When you have a $3 or $4 million loan going off [the problem loan list], it really improves the numbers," he said. Jacksonville Bank had a total of about $6 million in noncurrent loans as of Sept. 30.

Pomar said borrowers are trying to keep up with their payments during the recession.

"There's a lot of customers out there, a lot of businesses that are under stress. But they do whatever it takes to make their business viable," he said.

Barry Chandler, CEO of Oceanside Bank, said he has seen "a little improvement" in consumer and small business loan customers catching up on their late payments. Oceanside Bank's noncurrent loans fell by 19 percent in the quarter.

"You have to work through your problem assets," Chandler said. "I see ours beginning to stabilize a little bit."

Bishop said there may be some improvement in banks' performance in 2010, but it will be "not a lot better." He thinks it will take until 2011 for the banking industry to really turn around.

"I think 2010 will be the last of the horrific years" for the banking industry, he said.

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