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1:10 A.M. — It was a year that separated the wheat from the chaff among Southwest Florida's banks: At the end of 2010's first quarter, there were fewer banks here, but those that remained had better balance sheets overall.

That was mainly because the ones with the most nonperforming real estate loans had disappeared - courtesy of deals brokered by the Federal Deposit Insurance Co.

The two with the worst balance sheets - Naples-based Orion Bank ($277.3 million in nonperforming real estate loans) and Immokalee-based Florida Community Bank ($191.3 million) were closed down by state and federal regulators in the past year.

Banks that failed generally had concentrated their loans in areas such as home speculation that turned out to be prone to default, said Robbie Roepstorff, president of Fort Myers-based Edison National Bank.

"It was really the banks that had concentrations vs. the banks that didn't have concentrations - those are the ones who are going to survive this thing," said Roepstorff, whose bank had only $2.4 million in nonperforming loans at the end of the first quarter.

Now, she said, tough new rules by regulatory agencies such as the FDIC are ensuring that further excesses in the industry aren't occurring.

Karen Dorway, president of Coral Gables-based BauerFinancial, which provides financial information and research on the banking industry, said the nationwide numbers aren't out yet but that "anecdotally, from what I'm seeing reported, we are seeing some better numbers" around the country.

For one thing, she said, "The ones that were taken over, the good assets of those banks are now performing at other banks and the others are being managed by banks with loss-share agreements with the FDIC or else the FDIC is taking them."

As a result, Dorway said, the bad assets are still around, but at least they're not harming the banking industry.

Gary Tice, president and CEO of Naples-based First National Bank of the Gulf Coast, which opened last year and has no nonperforming debt, said the banks still in business are seeing some opportunities to pick up business but that it's still an extremely competitive environment.

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"It gives us a little more opportunity, but we have to earn that business," he said. "They (debt-burdened banks) are being acquired normally by healthy banks and those banks didn't acquire them just for the sake of watching their deposits run off."

It's also hard to find credit-worthy borrowers in Southwest Florida's depressed economic environment, Tice said. "There are some, but, remember, a lot of people are just doing their best to keep their head above water. And other people are doing a little better, but unfortunately those are the ones every banker wants. So the competition is always tough."

Is the worst over for the real estate market?

Paige Rausch, a Fort Myers-based real estate consultant who follows the foreclosure market, said there are signs things may be stabilizing.

"I see a lot more of the modifications (of mortgages) and the banks working with commercial borrowers," she said. "They're blending and extending loans and trying to work with the companies trying to make their payments. If someone's making an effort, they're working with him to avoid a complete commercial collapse."

Meanwhile, so many foreclosed homes have been repurchased from the lenders by investors paying cash that there's little chance for a repeat of the mortgage failures of the past three years, Rausch said.

Dorway said a major factor in how the banking industry does in the future is the fitful economic recovery.

"That's a big part," she said. "It seems we take two steps forward, one step back. It's still going to be a long process."

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