Fresh Loaf

Sorta-kinda optimistic Bloomberg Report from June about Georgia bank failures

And another bank bites the dust. The following comes from the FDIC, regarding the failure today of Atlanta-based Georgian Bank:

Georgian Bank, Atlanta, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Citizens Bank and Trust Company, Inc., Columbia, South Carolina, to assume all of the deposits of Georgian Bank.

(more…)

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The feds shut down five more failed banks over the weekend, two of which were in Georgia. 20 percent of U.S bank failures this year have been in Georgia, home to only four percent of the country’s banks.

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The AP’s Russ Bynum writes an excellent piece that helps explain why Georgia has found itself at the tippity top of a terrible list — the state with the highest number of bank failures:

Experts say it’s a combination of an antiquated state law that favored a plethora of smaller community banks over multi-branch giants; a population explosion in metro Atlanta that fueled massive suburban real estate development and a crush of new banks formed to cash in on the Atlanta boom shortly before the market tanked.

…

Georgia’s diversity of small banks was an asset when the economy was strong, with consumers benefiting from competitive rates and broader sources of credit, said James Verbrugge, a professor emeritus of finance at the University of Georgia’s Terry College of Business. It became a liability when the bottom fell out of the housing market and smaller banks had less capital to weather the crisis.

The excerpts don’t do the article justice. Give it a read for your daily dose of edumacation.

(Hat tip to Travis Fain)

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Alejandro linked to it below in this morning’s Newsdome, but I’ll save you the guessing game! From the Wall Street Journal:

ALPHARETTA, Ga. — Fourteen miles north of Atlanta is a suburb of wide boulevards, sleepy cul-de-sacs and bustling red-brick shopping centers. It also is the bank-failure capital of the U.S.

In just 13 months, three banks based within a few miles of each other went bust. Three more in other Atlanta suburbs were seized by regulators in 2008, as the region was haunted by overabundant home building, years of risky lending and one of the most relaxed regulatory environments in the U.S. for starting new banks, according to some experts.

…

Alpharetta Mayor Arthur Letchas bristles at the city’s distinction as an epicenter of bad banking, noting that 22 other banks have at least one office here. Technically, Integrity doesn’t count as Alpharetta-based, Mr. Letchas says, since its headquarters were just outside the city limits in Johns Creek, Ga.

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Well, we made it to 2009, and for my first new year’s resolution, I’m going to train my ass to jump over the Arc de Triumph at the Paris Las Vegas on a BMX bike … what’s that? Been done?! I otta knock the dicks outta your mouth …

• Three guesses on what city was Bank Failure Central … (hint: it’s not ITP, but close enough).
• Happy new year … happy new local laws.
• Wouldn’t be a new year without some fresh conflict in the Middle East. At least, Israel is reconsidering the cease-fire plan … A group of Atlantans are heading to Gaza to offer their support … even as Israel evacuates some foreigners.
• Out of power and out of K-street, Republicans plan to flee D.C. come inauguration time.
• A Muslim family inquires as to the “safest” place to sit on a plane and promptly gets the boot.
• About that Zune bug, Redmond has the fix.
• After spending weeks caring for injured son, a local family comes home to find their stuff gone. Given away for free on Craigslist. Bizarre.
• Is it 2009 yet? … er, FAIL.

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